Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — HOME DEPARTMENT

The Secretary of State was asked—

Racism

Mr. Barry Gardiner: If he will make a statement on progress made in combating racism in the police force. [99676]

The Secretary of State for the Home Department (Mr. Jack Straw): Many recommendations of the Macpherson report about racism in the police service have already been implemented, in line with the action plan that I published in March. The promised Bill to extend the scope of the Race Relations Act 1976 in respect of the police and other public authorities was published last Friday. New disciplinary procedures and a code of conduct came into effect in April, making racist language or behaviour a breach of the code. Also in April, I set targets for the recruitment, retention and progression of minority ethnic police officers. In addition, a nationally co-ordinated and funded programme of race awareness training is now under way in police forces.

Mr. Gardiner: I am grateful to my right hon. Friend for that response. Will he say how many prosecutions for racially motivated offences have been commenced under the provisions of the Crime and Disorder Act 1998?

Mr. Straw: The latest provisional information shows that there have been 99 convictions for the racially aggravated offences provided for under the 1998 Act. Although that is 99 offences too many, in one sense the fact that the prosecutions have taken place shows the importance of making such offences subject to the law.

Sir Sydney Chapman: Does the Home Secretary recall that, in one of his first speeches after his appointment as Commissioner of Police of the Metropolis, Sir Paul Condon condemned racism outright? Does the right hon. Gentleman agree that, in the almost seven years that he has been Commissioner, Sir Paul has put that approach into practice, with the result that there is now far less racism in the Metropolitan police

than formerly? As Sir Paul nears retirement, would not this be a good opportunity to congratulate him on what he has done to improve race relations in the metropolis?

Mr. Straw: I am delighted to join the hon. Gentleman in extending those congratulations to the Commissioner of Police of the Metropolis, whose record on tackling racism is consistent with his broader record of reducing crime in London very significantly during his period in office. It should also be put on record that, even before I introduced the targets for improving the recruitment and retention of black and Asian officers in the police, the Metropolitan police service under Sir Paul's stewardship had made considerable progress in that direction.

Electoral Reform

Mr. Martin Salter: If he will make a statement about reform of electoral procedure and voting systems. [99677]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): The Representation of the People Bill, which will modernise our electoral procedures, received its Second Reading last Tuesday.

Mr. Salter: Does my hon. Friend recall the representations that I made to him earlier this year, in which I drew attention to the fact that the British National party had submitted false European election nomination forms? In that way, because it could claim that it was fielding the requisite number of candidates, it was able to ensure that its disgusting and racist views could be broadcast on national television. How will the newly published Representation of the People Bill deal with that tactic? Does my hon. Friend plan to allow a longer period in which nomination papers can be checked to prevent such abuses?

Mr. O'Brien: We want to ensure that those who nominate candidates for electoral office are properly registered on the electoral register. The Representation of the People Bill will help in that regard. We also want to ensure that people who have the opportunity to use valuable national television and media time to put forward their political views comply properly with the law, and that they are not among those who incite racial hatred.

Mr. Peter Viggers: Will the Minister name another democratic country in which the electoral procedure and voting system in the second Chamber is effectively the patronage of the Prime Minister?

Mr. O'Brien: In asking about another country, I suspect that the hon. Gentleman is implying that that is what happens here. It is not quite like that. Perhaps the hon. Gentleman needs a lesson on the British constitution: the procedure does not work as he described.

Mr. Martin Linton: Does my hon. Friend accept that the provisions in the Representation of the People Bill for a rolling register and postal voting on demand amount to a huge step forward? However, will he


give further consideration to the suggestion that people who are vulnerable to domestic violence should be able to register anonymously on all published registers?

Mr. O'Brien: One of our concerns has been that the addresses of victims of domestic violence, and others, are widely available because they are on the electoral register. We are examining ways in which we can enable such people to be properly registered to vote, while ensuring that their names and addresses cannot be sold without their consent. In the past, such information has been disseminated by means of a CD-ROM given away free with a magazine, which meant that anyone wanting to find out where another person was could do so easily. The concerns expressed by my hon. Friend are very real, and I hope that we will be able to discuss them when the Bill is considered in Committee. In due course, I hope that the legislation will offer at least some protection for people in those circumstances.

Mr. Owen Paterson: In his reply to my hon. Friend the Member for Gosport (Mr. Viggers), the Minister said "It is not quite like that". If so, can he confirm that the millennium peers of whom we have heard will be appointed by the Appointments Commission, and will not be personally appointed by the Prime Minister?

Mr. O'Brien: For 18 years, the hon. Gentleman and his Conservative colleagues were quite happy to appoint various people to the House of Lords with no complaint about the process. By raising the matter only when a Labour Government are committed to modernising the constitution, they merely draw attention to their failure to do anything during those 18 years.

Prisoner Regimes

Jane Griffiths: How much the Government are investing in programmes to provide constructive regimes for prisoners. [99678]

The Minister of State, Home Office (Mr. Paul Boateng): The Government have a clear commitment to develop constructive regimes that reduce the risk of reoffending. The comprehensive spending review settlement included an additional £660 million for the Prison Service, a substantial part of which—£226 million—is for such regimes, including drugs, education and offending behaviour programmes.

Jane Griffiths: I thank my right hon. Friend for that welcome reply. He will be aware that Reading young offenders institution was recently commended by the inspectorate for its work in education and for having a midwife on site to assist young male inmates with parenting education. Will he join me in congratulating the YOI on that work?

Mr. Boateng: I certainly congratulate Reading YOI on its work, and I am grateful to my hon. Friend for the care and attention that she has given to it. The CSR allocated £200,000 to the budget in her area, and that will allow the introduction over the next year of expanded educational provision, an enhanced thinking skills course, counselling, advice, referral, assessment and throughcare support—or CARATS counselling—and a detox unit as part of a

drugs strategy. The appointment of a voluntary drugs testing officer, increased time for probation bail information and capital funding for two safe cells to help to reduce suicides in custody will also make an appreciable difference to the safety of those held at Reading. Importantly, all that will also contribute to reducing the risk of reoffending. Protecting the public is what our policy is all about.

Miss Ann Widdecombe: Will the Minister acknowledge that, according to the most recent Prison Service annual report, purposeful activity has declined to less than 23 hours a week on average, the lowest level since 1991?

Mr. Boateng: I can assure the right hon. Lady that we have put in place a target for 1999–2000 of 24 hours a prisoner a week, and we are well on the way to achieving that goal. This Government, rather than her own, have put moneys into constructive activity in prisons. This Government, rather than hers, have placed a real emphasis on protecting the public. We shall be remembered for that, rather than for justifying chaining pregnant women to their beds.

Miss Widdecombe: The right hon. Gentleman says that he has a target of 24 hours a week, which may be some improvement on the current 22.8 hours a week. Will he acknowledge, however, that it does not begin to match the 26 hours a week that we achieved in 1994–95?

Mr. Boateng: Year in and year out, the provision made for prisoners held under the Conservative Government failed to address the basic levels of numeracy and literacy that determine whether prisoners get jobs when they are released. We inherited a situation in which the literacy and numeracy skills of 60 per cent. of prisoners disqualified them from more than 90 per cent. of all jobs. We intend to address that situation. The Conservatives had 18 years in which do so. They did not do it, but we will.

Miss Widdecombe: May I therefore deduce from the Minister's two answers that, yes, purposeful activity is indeed at its lowest level since 1991, and that, yes, the target is two hours lower than the one we achieved during our term in Government?

Mr. Boateng: rose—

Miss Widdecombe: I am glad of the Minister's eagerness, but would he answer one more question? If purposeful activity currently fills 22.8 hours a week, it follows that most prisoners spend an average of only four hours a day in purposeful activity. This is not a trick question, and I do not require an answer to the decimal point, but can the Minister tell me roughly what percentage of the convicted population manages more than six hours a day?

Mr. Boateng: If the right hon. Lady wants an accurate answer, she will understand that I shall write to her and give her an accurate answer—to the lowest percentage decimal point. However, in the meantime, she will understand, from my answers to her questions, that we are


on the job that she palpably failed to address. Labour is delivering; she failed to do so. The public were put at risk; we are protecting the public.

Mr. Andrew Mackinlay: Although I recognise the importance that my right hon. Friend puts on numeracy and literacy, will he undertake to review the fact that arrangements are currently not in place so that the relatively small number of long-term prisoners who have passed Open university degrees in prison can pursue postgraduate studies? They are unable to do so not through lack of facilities, but because of the lack of financial resources available to each governor. Will my right hon. Friend bear in mind that those prisoners who can show the way in such study will not only benefit themselves, but will offer an example of leadership to many other prisoners? Will he consider the matter as there is currently a deficiency?

Mr. Boateng: I would be only too happy to look at the matter and, indeed, to meet my hon. Friend if that would be of assistance.

Mr. John Bercow: Given the revelation by the former Under-Secretary of State for the Home Department, now the Under-Secretary of State for Northern Ireland, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), in a written answer in July 1999 to my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe), that prisoners will have manufactured 260,000 pairs of slippers between March 1997 and March 2000, will the Minister tell the House what assessment he and his right hon. and hon. Friends have made of the job opportunities to which that collective manufacture has led, or will lead?

Mr. Boateng: Two hundred and sixty thousand pairs of slippers, but not one of them fitted the right hon. Member for Maidstone and The Weald (Miss Widdecombe).

Closed Circuit Television

Mr. Ivan Henderson: How much money the Government are investing nationally in CCTV systems. [99679]

The Minister of State, Home Office (Mr. Charles Clarke): Under the crime reduction programme closed circuit television initiative, we are investing £153 million over three years in new or extended CCTV systems in England and Wales. A further £13 million has been allocated to Scotland and £4 million to Northern Ireland. In England and Wales, we expect to allocate about £68 million to schemes during the current financial year, with the balance to be allocated in years two and three.
The first 35 successful bids were announced last week. They were awarded £3.9 million of this year's planned £68 million. Further awards will be announced in the middle of January.

Mr. Henderson: I thank the Minister for that reply. He will be aware that, under the crime and disorder partnership, Tendring district council has put in a bid for a self-contained mobile CCTV scheme. If the bid is successful, the council expects to reduce repeat victimisation by 30 per cent., by reducing criminal damage

by 100 incidents a year, and car crime by 80 incidents a year. The scheme would then be extended from towns to rural areas. Will my hon. Friend assure me that he will give the scheme his personal careful consideration? Will he also tell the House when he expects to announce further successful bids for such schemes?

Mr. Clarke: I can assure my hon. Friend that I will give the matter my close personal attention. I congratulate the Tendring crime and disorder partnership on its bid for £36,000 and the potential total capital of about £120,000. That application was one of 373 bids shortlisted to prepare final proposals. As I said earlier, the results are due to be announced in mid-January.

Miss Julie Kirkbride: I am sure that the Minister will be aware of the great success of the CCTV scheme in cutting both crime and vandalism in the centre of Bromsgrove. Of course, we have the previous Conservative Government to thank for their generosity in promoting that scheme. May I implore the Labour Government to be equally generous to the people of Bromsgrove? The district council has proposed the extension of the scheme to the shopping and village areas; that would enhance the benefits of the scheme—lowering vandalism and making Bromsgrove a safer place. I implore the Minister to consider that—especially in the light of the West Mercia police force budget and the reduction in the number of constables on the streets. If we cannot have constables to police our streets, perhaps we can have CCTV instead.

Mr. Clarke: The hon. Lady will be aware that the Government have allocated £170 million to CCTV compared with less than £39 million invested under the previous Government. I shall carefully consider the Bromsgrove scheme. I am not sure whether it is one of the 373 bids made so far, but it will be closely considered.

Dr. Vincent Cable: What steps is the Minister taking to ensure that that valuable capital programme is backed by current spending? There is a growing suspicion that, in many cases, CCTV systems do not contain film, are not continually monitored and that the deterrent effect on vandals and graffiti artists is being dissipated.

Mr. Clarke: I should be interested to hear specific examples of that. The schemes that I have seen have been very successful. They have demonstrated substantial revenue savings—for example, on insurance and maintenance—and they have deterred crime in the way with which the hon. Gentleman is familiar. I am not aware of general unreadiness to put revenue funding into such schemes, but, if the hon. Gentleman has specific examples of that, I shall be glad to consider them.

Norwich Prison

Dr. Ian Gibson: What assessment he has made of the level of overcrowding in Norwich prison. [99680]

The Minister of State, Home Office (Mr. Paul Boateng): The operational capacity for Norwich prison is 744. The highest population at Norwich over the last


six months was on 19 September, when 725 prisoners were in custody. The average population at Norwich during the current financial year has been 698.

Dr. Gibson: I thank my right hon. Friend for that answer. Does he agree that a good general definition of overcrowding in prisons would be two prisoners in a cell designed for one? Would he further correlate the figures for overcrowding with the high suicide rates in prisons—for example, there have been 19 suicides in Norwich in the past few years? Finally, has he plans to emulate the judge in North Carolina who paraded prisoners down Main street with a placard round their necks stating what their indiscretions had been? We can think of some people in this country who might fall into that category.

Mr. Boateng: That is a very interesting suggestion and one that I should be only too happy to discuss with my hon. Friend if he wishes to introduce the North Carolina example in Norwich. It is important to recognise that prison governors have a responsibility to assess what is a safe number to hold in a particular jail and they do that by considering issues such as ventilation, light and space as well as design. In Norwich, that number has been assessed as 744 and the prison population is currently below that capacity.
It is important to ensure that we take steps within the prison population to detain prisoners in safe and decent environments, and that means giving the problems of suicide and self-harm a proper degree of priority. I do that and I know that the Attorney-General, when he was the Minister responsible for prisons, met my hon. Friend to discuss it. I continue to keep the position at Norwich under review and I pay particular tribute to the Samaritans in Norwich and to the prisoners who participate in the listeners scheme, which has shown itself able to produce positive results in reducing the impact of suicide and self-harm.

Special Constables

Mr. Edward Leigh: If he will make it his policy to increase the number of special constables. [99681]

The Minister of State, Home Office (Mr. Charles Clarke): Yes, it is. Special constables are an excellent example of the police and the public working together to tackle crime. The Government strongly support the efforts of police forces to recruit more special constables. A special constables week was held in January 1999 during which many events were held by forces around the country.
In addition, the Home Office provided £500,000 worth of local press and radio advertising for 12 forces. It has also produced a recruitment video, a series of posters and a recruitment brochure for forces.

Mr. Leigh: If all that is true, why has the number of special constables decreased by 3,000 since the general election? If the Minister wants to avoid the charge that he is simply tough on crime-fighters rather than tough on crime, will he think of some truly imaginative ways of

increasing recruitment—for example, by giving special constables the same terms, conditions and pay that people in the Territorial Army receive?

Mr. Clarke: We believe that the main reason for the decline in numbers has been the higher recruiting standards that are now used for special constables. Those higher standards reflect the fact that special constables are being trained and deployed in a wider variety of duties than before, including more so-called front-line duties. The recruiting criteria are now very similar to those used for regular officers, so many applicants who previously would have been accepted in the special constabulary are now being rejected.

Dr. Brian Iddon: Does my hon. Friend agree that it was the previous Government who handed over responsibility for police figures to chief constables, and that no Government, not even a Conservative Government, could at this time guarantee the numbers of police available and operative in any town or city?

Mr. Clarke: I am grateful to my hon. Friend for that point, which is entirely accurate. Legislation passed in 1994 by the previous Government removed from the Home Secretary the power to specify police numbers throughout the country.

Mr. John Greenway (Ryedale): The Conservative party applauds the excellent work of special constables, but does not the Minister recognise that any extra help from specials will not plug the massive hole in front-line policing, which as today's BBC survey has revealed, consists of 3,000 unfilled posts? The pattern across the country is becoming depressingly familiar: retired officers are not replaced; vacant posts are unfilled; and recruitment plans are postponed or frozen—all to save money from overstretched budgets. What a contrast that is to the 16,000 extra police officers recruited under the Conservatives. When will the Minister face up to what everyone else in the police service can see is the worst crisis in police manpower since Labour was last in office?

Mr. Clarke: The most significant event to address that issue in recent months was my right hon. Friend the Home Secretary's statement that we would be providing 5,000 extra police officers over and above the levels previously indicated. As the hon. Gentleman will know, last Thursday, we published guidance on that in which we specifically state the means by which police authorities can apply for those resources and ensure, as they could not under the previous Government's proposals, that they are used for police numbers. That is action that the Government are taking to address those issues.

Racism

Mrs. Helen Brinton: What steps his Department is taking to combat racism in the public sector. [99683]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): We have now published a Bill to bring all the public sector, including the police, within race relations legislation. Last week,


we also published an equality statement that set race equality within a wider strategy to ensure that the public sector promotes equality and leads by example.

Mrs. Brinton: I thank the Minister for that welcome reply. As he will know, the case of a constituent of mine has recently given me cause to look in depth at the role of race and racism in our mental health service. I was shocked to discover that everything from the first diagnosis to drug administration and the control and restraint methods employed can be directly or indirectly affected by racism. What reassurances can my hon. Friend give to the thousands of black and Asian men and women in the mental health system that racism will be tackled by the race relations Bill, which was recently announced in the Queen's Speech?

Mr. O'Brien: The Bill covers mental health patients in the same way that it covers others. Direct discrimination and victimisation of a mentally ill patient by any specified public authority in the performance of its functions, which are currently covered by the Race Relations Act 1976, will become unlawful. Discrimination against mentally ill patients in sectors already covered by the Act, such as the provision of goods, facilities and services, will of course remain unlawful.

Mr. David Lidington: Have the Government reached a final conclusion on the proposal from the Commission for Racial Equality that the burden of proof should be reversed in cases of alleged racial discrimination? Does not the Minister agree that to implement such a proposal would risk severely damaging, not improving, race relations in this country?

Mr. O'Brien: We will obviously take account of what the hon. Gentleman has said in reaching our conclusions. We have considered the third review of race relations legislation by the Commission for Racial Equality. It contains several proposals that we strongly support, and we are still considering other proposals, including the one referred to by the hon. Gentleman. In due course, we shall introduce our proposals on how to proceed. The key point is that the House should take a lead, both with the Bill that will shortly come before the House and with later legislation, to ensure that we create a successful, multi-racial society in Britain.

Fiona Mactaggart (Slough): Is the Minister aware that, although welcome, the Bill's limited proposals will not necessarily tackle institutionalised racism—so powerfully identified by the Macpherson report—in some of our public services, especially the police? Has he considered whether ensuring that public services generally have the duty to promote good race relations which we have already given to the Greater London Authority might result in a better piece of legislation?

Mr. O'Brien: I do not agree that the Bill will not tackle some of the issues of institutional racism identified by the Macpherson report: the Bill is a direct response to it. However, I agree that we should consider imposing a statutory duty on public authorities to promote race equality. Indeed, last week, we announced that, in due

course and when parliamentary time allows, we shall ensure that public authorities have a duty to promote race equality.

Lancashire Constabulary

Mr. Michael Jack: What assessment he has made of the impact on police numbers in Lancashire of his projected financial allocations to the county's force for 2000–01. [99684]

The Secretary of State for the Home Department (Mr. Jack Straw): The provisional funding allocation for the Lancashire police authority for 2000–01 is £185.3 million. That is an increase of 3.9 per cent., which is more than the average increase for England and Wales of 2.8 per cent. Within the overall budget set by the police authority, it is for the chief officer to determine staffing levels.

Mr. Jack: I am grateful to the Home Secretary for his response, as is the Lancashire force for the additional money it is to receive for next year. However, as a Lancashire Member of Parliament, the right hon. Gentleman will be aware that the additional money will barely cover the additional costs—increases in pay, prices and the police pension fund—that the force has to bear. There is no guarantee that the crime-fighting fund will provide Lancashire with guaranteed extra resources to expand the force and recruit new officers. In the light of that financial position, will the right hon. Gentleman spell out to his home force how it is to recruit additional police officers to carry out its duties?

Mr. Straw: I will take lectures on resources for the police service from almost anyone other than those who supported the previous Administration and who now support the current Opposition Front-Bench team. I remind the right hon. Gentleman that he cannot say one thing in Lancashire and another down here. He and his right hon. and hon. Friends on the Front Bench have criticised and damned our spending as reckless, but they speak with a forked tongue on the issue of police funding.
Let me give the right hon. Gentleman the good news regarding Lancashire police spending. First, figures with which I was provided before coming into the Chamber state that officer numbers in Lancashire are now at an all-time record level. Secondly, thanks to excellent work by the chief constable and her colleagues, crime in the area fell by 10.1 per cent. compared with a national average of 1.4 per cent.—a record that many forces would do well to emulate. Thirdly, to answer the right hon. Gentleman, I can do no better than quote the chief constable, Mrs. Pauline Clare, who said:
An increase of 4 per cent. is more than we expected and should be sufficient to match anticipated increases in pay and inflation. It should also help us to maintain police officer numbers.

Mr. Simon Hughes: Although the figures show a small real-terms cash increase for Lancashire police, next year, the people of London and of Gloucestershire face a cut for the fourth year in a row—

Madam Speaker: Order. I respectfully draw the hon. Gentleman's attention to the fact that the question is about police numbers in Lancashire. Therefore, he must speak only about Lancashire, not about other areas.

Mr. Hughes: It was just how I started. Although there is to be an increase for Lancashire police for the coming year, there are many other forces that will not receive that increase and, indeed, some that will experience a fourth cut in four years. Given that the Police Federation estimates that the crime-fighting fund will not even replace countrywide—

Madam Speaker: In Lancashire.

Mr. Hughes: In Lancashire and countrywide, those who are retiring will not be replaced. Will the Home Secretary make sure that the Government concentrate less on ending the north-south divide and more on ending the divide between what they promise and what they do?

Madam Speaker: I do not require the Home Secretary to answer a question which is not related to the Question on the Order Paper. The Question is about Lancashire. We shall move on.

Crime and Disorder Act 1998

Siobhain McDonagh: What consultations he has held with the Magistrates Association on the implementation of the orders made available by the Crime and Disorder Act 1998. [99685]

The Secretary of State for the Home Department (Mr. Jack Straw): We have consulted extensively with the Magistrates Association and individual magistrates on the implementation, in particular, of the youth justice provisions of the Crime and Disorder Act 1998. Courts are participating in the pilots of the Act's new measures, to identify effective practice ahead of national implementation. As at 31 October, mainly but not exclusively in the pilot areas, I am pleased to tell the House that there have been 5,000 reprimands issued, 2,500 final warnings, 900 reparation orders, 533 action plan orders, 178 parenting orders, 10 anti-social behaviour orders and two child safety orders.

Siobhain McDonagh: I thank my right hon. Friend for that answer. Does he agree with me that it is essential that we encourage magistrates, the police and local authorities to consider making anti-social behaviour orders, as they provide one of the only ways of solving many of the problems that my constituents face in areas such as Pollards Hill?

Mr. Straw: Yes, the introduction of anti-social behaviour orders was not only widely welcomed but widely requested by the police and by local authorities of all political persuasions. The effectiveness of the orders, where they have been used, is striking. I quote:
We should not underestimate too the deterrent effect of the new powers on the behaviour of others, and their potential to develop safer communities.

That was the view of Chief Inspector Royston Smith, of Derbyshire police, after he had successfully secured an anti-social behaviour order against appalling behaviour in his area.

Mr. Geoffrey Clifton-Brown: Given that the Crime and Disorder Act was one of the Government's flagship Bills, will the Home Secretary tell us why, on the Jimmy Young show recently, he was forced to admit that he might have to consider amendments to the Act because only 10 anti-social behaviour orders and two child curfew orders have been made? Is that an example of an Act working properly to reduce crime?

Mr. Straw: The Act is indeed one of the Government's major flagships. I repeatedly meet police officers of every rank who say of the Act that it is the most welcome piece of legislation that they have been asked to implement in the whole of their careers.
The record of anti-social behaviour orders needs to be set against the outstanding success of the Act overall, including 900 reparation orders, 533 action plan orders and 178 parenting orders. The hon. Gentleman needs to explain to his constituents whether or not he is in favour of, or against, taking tough action of this kind against anti-social neighbours. If the former, he should be doing what many of my right hon. and hon. Friends are doing and asking the authorities behind the action to come forward and seek orders against the sort of appalling anti-social behaviour about which the previous Administration did nothing.

Mr. Bob Blizzard: Is my right hon. Friend aware that in my constituency so far one anti-social behaviour order has been implemented? When I first discovered that, I was somewhat disappointed that more use had not been made of a very important measure. However, wider research, confirmed by my right hon. Friend's answer, shows that my constituency is somewhat in the vanguard. When I discussed the matter with my local police and the local authority, I found that they were keen to use the orders but had not always found the other bodies and agencies involved as helpful as they might have been. Will my right hon. Friend pursue that with those other bodies? The one order that has been implemented is extremely successful and is widely supported by the public. That is the way people want us to go.

Mr. Straw: I am grateful to my hon. Friend. We are doing everything that we can to encourage local authorities, magistrates and the police service to follow the example of the authorities in my hon. Friend's constituency in Derbyshire—and in Blackburn as well—where the obtaining of anti-social behaviour orders has proved extremely effective. I have asked my noble Friend Lord Warner, who is also chair of the Youth Justice Board, to take a particular interest in the problems faced by some authorities in seeking such orders.
Before Opposition Members sneer and get on the wrong side of the argument about dealing with anti-social behaviour, I should remind them of a number of the new offences that they trumpeted at the time the relevant legislation was going through Parliament, including the Public Order Act 1986 and the Criminal Justice and Public Order Act 1994; however, 13 years and five years


later, respectively, the number of such convictions has been fewer than five, despite all the Conservatives' bluster at the time.
What we see now, on the part of Government and of the police forces and local authorities that are in the vanguard, is a determination properly to use all the orders in the Crime and Disorder Act. The overall figures show already that the Act has been an outstanding success.

Child Curfew Orders

Mr. Tim Loughton: How many local child curfew orders have been issued under the provisions of the Crime and Disorder Act 1998. [99686]

The Minister of State, Home Office (Mr. Charles Clarke): None yet. It is for local authorities to decide whether to apply for confirmation of a local child curfew scheme, in the light of their work on wider crime and disorder strategies.

Mr. Loughton: Does the Minister agree that the Government's child curfew orders have been exposed as a gimmick? They did nothing in my constituency, in Shoreham and Worthing, to counter 13, 14 or 15-year-old hooligans spraying graffiti and smashing up town centres, especially following the reduction of police numbers in the county by 161. If it is true that the Home Secretary is to have another go less than a year on, and that he plans to amend the Crime and Disorder Act, will the Minister acknowledge that getting tough on youth crime requires more than soundbites and pledge cards?

Mr. Clarke: That was a fine soundbite. I do not accept that the orders are a gimmick. I must put the hon. Gentleman straight. Local child curfew orders were an additional measure to counteract public misbehaviour by children under 10, not to deal with the 13, 14 and 15-year-olds to whom the hon. Gentleman referred. Child curfew orders are one of the range of measures available to crime reduction partnerships under the Crime and Disorder Act. The range of orders being taken up and used, as my right hon. Friend the Home Secretary outlined, demonstrates that the partnerships have been a tremendous success in achieving co-ordination and in deterring people from activities in which they might otherwise have engaged. The hon. Gentleman should sort out whether he is for or against legislating to prevent anti-social behaviour.

Ms Rosie Winterton: The provision for child curfews under the Crime and Disorder Act has been warmly welcomed by both police and constituents in my area. The curfews depend, of course, on successful partnerships being built up. My right hon. Friend the Home Secretary referred to initiatives to find out whether problems are occurring in partnerships, but could not a more proactive approach be taken to circulate local authorities and perhaps Members of Parliament with examples of the successful working of partnerships, so that we can take forward such measures in our areas?

Mr. Clarke: What my hon. Friend suggests is welcome and correct. That was one of the proposals that we set out in our crime reduction paper, published last week. We

acknowledged the truth of what my hon. Friend says: we need to do more proactively in relation to local partnerships, and give examples of draft protocols, guidelines, training, best practice and so on, to ensure that the measures available are taken up in the most effective way.

Sex Offenders

Ms Margaret Moran: What steps the Government are taking to ensure that (a) children and (b) other members of the public are protected from sex offenders. [99687]

The Minister of State, Home Office (Mr. Paul Boateng): The Government are committed to protecting children and others from sex offenders. The Crime and Disorder Act 1998 contained strong additional safeguards in the new sex offender orders and extended supervision provisions. This Session, as part of the crime and public protection Bill, we are bringing forward proposals for a scheme to prevent unsuitable people, including sex offenders, from working with children.

Ms Moran: I welcome the measures that my right hon. Friend outlined to give priority to public protection from sex offenders—in sharp contrast to the Opposition, who did not consider the issue sufficiently serious to include it among their so-called guarantees. Is my right hon. Friend aware that there is still considerable concern about the low number of prosecutions of sex offenders in cases in which the victims are children of five and under or adults with mental incapacities? What additional protections does he propose to introduce to ensure that the most vulnerable in our society are protected?

Mr. Boateng: My hon. Friend has a track record of concern and action in relation to the protection of very young children from such sex predators. We look to the Youth Justice and Criminal Evidence Act 1999 to provide a range of additional safeguards for children and young people, to ensure that the court has the opportunity to receive the best evidence from them. It is vital that the courts, the Crown Prosecution Service and Victim Support work together to ensure that those wicked people are brought to justice and that our children are properly protected.

Rural Policing

Mr. Stephen O'Brien: What measures he is taking to reduce police response times in rural areas. [99688]

The Minister of State, Home Office (Mr. Charles Clarke): The Government place great emphasis on improving police response times to emergency calls. At present, individual forces set their targets. The Association of Chief Police Officers is considering whether to move to a maximum 20-minute target time for all rural forces across the country. The current target time in Cheshire is 15 minutes, which is already ahead of that target. We intend to drive down the response time through the use of improved technology and more police officers, as we have already outlined.

Mr. O'Brien: As the Minister knows, police response times take, on average, twice as long in rural areas as in


urban areas. That, coupled with the closure of police stations in rural areas, exacerbates rural dwellers' increasing sense of insecurity and desperation. Why do not the Home Secretary and the Minister implement the recommendations of the Home Office report on rural police funding? Does the Minister agree that his decision is yet another example of the Government's antagonism towards those who live in rural areas?

Mr. Clarke: That is nonsense, although I congratulate the hon. Gentleman on his first contribution to Home Office questions. The facts for the Cheshire police are clear: they received an increase of £4.7 million—a 4.1 per cent. increase, which is well above the national average—and 28 extra officers. The force numbers are therefore increasing.
The Government are strongly committed to dealing with rural crime. We have established a series of measures, including those on reducing response times, which, I acknowledge to the hon. Gentleman, are an important aspect of community confidence in rural areas. We shall continue to drive forward the changes, which, I further acknowledge, are very necessary.

Mrs. Gwyneth Dunwoody: My hon. Friend may not be aware that there has been a sudden spate in rural areas of thefts of such expensive items as 4x4s and tractors. That causes alarm. However, my hon. Friend may also like to acknowledge that those in the rural area around Nantwich, especially the officers at Nantwich police station, are doing a tremendous job which is greatly appreciated by those who are most affected. When I accidentally set off the alarms in a Cheshire county council library on Saturday, the police responded at twice the speed of the relevant private security firm.

Mr. Clarke: I might have known that my hon. Friend was precisely the sort of dangerous, anti-social element that the Government are trying to tackle—in several different contexts. I am grateful for her contribution. In many parts of the country, the farm watch initiatives, which cover some of the farm equipment that my hon. Friend mentioned, have been effective. They are another consequence of effective local crime reduction partnerships.

Mr. David Heath: Is not the problem the fact that patrolling in rural areas is virtually non-existent, and that the thin blue line has become extremely thin in much of rural Britain? Given the problems that we have already discussed, such as difficulties in recruiting, training, equipping and retaining special constables, would it not be an idea to examine the policy on fire brigades, which is covered by the other half of the Home Office operation, and consider retained constables?

Mr. Clarke: I do not accept for a moment what the hon. Gentleman says about patrolling in rural areas, but I accept that there is a lot of interest in rural neighbourhood special constables or retained constables, and those issues are worth pursuing. Some rural forces have a strong local special constable presence, which is an example that we are looking at carefully across the country; and my hon. Friend the Under-Secretary of State and I are carefully considering

ways in which not only the fire service but the ambulance service can work with the police to ensure that there is a strong community safety element in rural areas.

Anti-social Behaviour Orders

Mr. Nigel Beard: If he will list the anti-social behaviour orders (a) granted by the courts and (b) currently applied for. [99689]

The Minister of State, Home Office (Mr. Charles Clarke): Information on the number of anti-social behaviour orders granted or in progress is not held centrally, but I am aware of 10 ASBOs made to date. Orders have been granted in north Somerset—which my hon. Friends will be grateful to hear is a Conservative council area—Liverpool, Derbyshire, Redditch, Camden, Blackburn, Coventry and Waveney. They are a new weapon to help the police and local authorities to tackle anti-social behaviour in the community. We are giving more impetus to that work, and are setting up an action group to achieve that and to ensure that the police and local authorities have the confidence to take action quickly and efficiently.

Mr. Beard: I thank my hon. Friend for that reply. Is he aware that some of the delay involved in serving anti-social behaviour orders arises from difficulties with establishing the requisite evidence, either because the complaints are not sufficiently specific or because of intimidation or improvements in behaviour when inquiries are known to be afoot? Will he consider ways in which those difficulties might be overcome?

Mr. Clarke: Certainly I will. As my right hon. Friend the Home Secretary said earlier, we are learning how best to address the evidential issues. We are considering ideas such as the use of portable videos in particular areas to strengthen the evidential basis of action, and we are talking to local authorities and police across the country to learn from their experience how we can give better guidance to ensure that there is much higher take-up of ASBOs. I hope that all Members of the House will encourage their local authorities and police to take up ASBOs in the most effective way.

Mr. James Clappison: The Minister may read out a list of individual local authorities that have made orders, but is not the reality that pitifully few have been issued? Does he not recall that the Government promised that this measure was their way of addressing disorder in estates up and down the country? Should he not accept that the courts, the police and the local authorities have found the orders difficult to operate? Would not it be sensible to invite Lord Warner, as part of the review that the Home Secretary has announced, to consider the legal character of the orders? Instead of blaming civil rights lawyers, local authorities and Uncle Tom Cobbleigh and all, the Government should look at the nature of the orders, because that is where the defects arise. They will have to accept responsibility for that deficiency.

Mr. Clarke: I have already said, as has my right hon. Friend the Home Secretary, that we intend to provide much stronger guidance, stronger guidelines and better protocols to address those issues. I am acutely conscious that Hertsmere is not one of the authorities that have so far


issued an ASBO, and I hope that the hon. Gentleman has been doing his best to persuade it and local police to use one in his constituency.

Stasi Spies

Dr. Julian Lewis: What steps are being taken to investigate British Stasi spies, information about whom has been discovered in the Berlin Stasi archive. [99692]

The Secretary of State for the Home Department (Mr. Jack Straw): As part of its remit under the Security Service Act 1989, the Security Service has investigated, and continues to investigate, British citizens and some others recorded in the East German intelligence service's records as having worked for the Stasi. Those investigations were, and are, handled in the same way as other similar investigations.

Dr. Lewis: I thank the Home Secretary for that reply, but unfortunately it does not accord with the information at my disposal on this matter, which I first raised in the House more than a month ago. My information is that the Berlin archive of the Stasi has not been visited by investigators from this country; Dr. Anthony Glees, the senior lecturer who discovered in that archive the detailed material incriminating Dr. Robin Pearson, the would-be university recruiter for the Stasi, has still not been interviewed by the police or the Security Service; and, as far as is known, the material that was given to the BBC, which formed the basis of the programme that brought this matter to public attention, has still not been examined. Is he assuring the House that that material has already been examined? If not, when will it be examined?

Mr. Straw: The House will understand that I cannot speak about the information available to the hon. Gentleman, but only about that available to me.

Mr. John Bercow: A poor substitute.

Mr. Straw: If this will reassure the hon. Gentleman—[Interruption.]

Madam Speaker: Order. I am afraid I heard that aside rather later than the rest of the House.

Mr. Straw: I will not attempt to follow that, Madam Speaker.
I can tell the hon. Gentleman that the records have revealed many leads in cases involving the investigation of more than 100 individuals.

Community Sentences

Maria Eagle: What measures he proposes to increase the confidence of the public and the courts in the use of community sentences. [99693]

The Minister of State, Home Office (Mr. Paul Boateng): The public need to be satisfied that community sentences are effective and properly enforced. We are improving the quality and effectiveness of probation service work through the "what works" initiative, and we are

tightening enforcement procedures through work with the Association of Chief Officers of Probation and through more rigorous national standards.

Maria Eagle: Given that reconviction rates following the imposition of custodial sentences are about the same as reconviction rates following the imposition of community sentences, does my right hon. Friend believe that the courts have got the balance of sentencing about right, or does he think that community sentences should be used more regularly by the courts?

Mr. Boateng: It is important to examine those statistics with great care, because they are compiled on a different basis. We are determined to ensure that community and custodial sentences are better informed as to content, and that the protection of the public lies at the heart of both.

Crime and Disorder Partnerships

Mrs. Sylvia Heal: If he will make a statement on the level of activity of crime and disorder partnerships. [99694]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): The crime and disorder reduction partnerships brought into being by the Crime and Disorder Act 1998 published their strategies on 1 April 1999 and are currently implementing them. We recently published a crime reduction strategy, which includes measures to support and develop partnerships' effectiveness.

Mrs. Heal: Will my hon. Friend join me in welcoming the establishment of many partnerships around the country? That shows the Government's commitment to getting all parts of our communities working together to tackle crime and disorder. Will he congratulate Sandwell metropolitan borough council in my constituency, where two anti-burglary initiatives have produced a significant reduction in domestic burglary rates in recent months? I hope that he and his colleagues will look favourably on a bid by the Halesowen Highfields estate for CCTV, so that it, too, may benefit from a reduction in crime.

Mr. O'Brien: I join my hon. Friend in welcoming the work that is being done in Sandwell. I also agree with her that the work of crime and disorder reduction partnerships is enormously important. It will be one of the most significant contributions that there has been to tackling the problems of crime and disorder in this country. On the CCTV application, she will already have heard in earlier questions that we are putting a considerable amount of funding into that, and all applications will be considered.

Oakington Detention Centre

Mr. Jeremy Corbyn: When Oakington detention centre will be opened. [99696]

The Minister of State, Home Office (Mrs. Barbara Roche): We are aiming to open the centre early in the new year, but it is likely to take a few months to build up to full capacity.

Mr. Corbyn: I thank the Minister for that answer. What details about the administration of the Oakington detention


centre will be made public, and how many people will be detained in it throughout its life? Does she accept that many people in this country and in other parts of the world find it fundamentally disgraceful that this country still imprisons a large number of asylum seekers? Ours is the only country in Europe routinely to hold asylum seekers in detention.

Mrs. Roche: I totally agree with my hon. Friend. We detain about 1 per cent. of asylum seekers. The centre will have the capacity to take up to 400 people, but we expect to build it up gradually. It will be a reception facility that will process straightforward applications—we are talking about a seven-day period. The question that my hon. Friend must ask himself is how European Union countries deal with unfounded asylum cases, because they all face that problem. We must have this system in place to deal properly with genuine refugees and to progress their cases.

IT Projects

Mr. David Heath: How many information technology projects currently being implemented, for which his Department is responsible, are behind schedule. [99697]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): The hon. Gentleman has raised an enormously important issue.

Eleven of the 17 major projects currently under way are expected to complete, or did complete, later than the date originally estimated. Timetables and milestones are kept continually under review. Currently, following updated reviews, all Home Office information technology projects are on target.

Mr. Heath: I thank the Minister for his answer, but the situation is a bit of a shambles, and it is costing the country a lot of money. In a week during when we shall discuss the Freedom of Information Bill, would it not be appropriate for the Minister to place in the Library the terms of the contracts and the penalties payable by the IT companies, so that we can all see what the Government are doing on our behalf?

Mr. O'Brien: We have said that we will seek to be as open as possible in regard to the contracts that have already been signed. As the hon. Gentleman will appreciate, they were signed on the basis of certain conditions and criteria, and obviously we shall be bound by the contracts that currently exist; but as we have said, our policy will be to be as open as we can in making available the contents of future contracts.
Many private sector projects have experienced some difficulties. The public sector deals with matters on a larger scale; as a result, the opportunities for problems to arise are inevitably greater.

Passports

The Secretary of State for the Home Department (Mr. Jack Straw): With permission, Madam Speaker, I wish to make a statement to explain why passport fees are to increase by £7 to £28 for the standard passport, and by £3.80 to £14.80 for the child's passport. I am also publishing the Passport Agency's corporate and business plan for 1999–2002, together with a separate recovery plan. I am placing both documents in the Library of the House and the Vote Office.
As the House is aware, the agency encountered major problems last summer. I greatly regret the severe inconvenience caused to the public, and repeat my apology for what happened. However, the emergency measures that I authorised in the summer have proved effective. Turnround times for passport applications have been within 10 working days since August. Currently, all offices are processing work within a maximum of four working days. The current total backlog is 47,000 applications, which represents about four days' work.
A report from the National Audit Office, published in October, found that £12.6 million had been incurred meeting the exceptional costs involved in remedying the situation that arose in the summer. I think the whole House would accept that it would not be right for those costs to be met by a fee increase, and I have therefore agreed with the agency's new chief executive that they will be met instead by a programme of efficiency savings.
The NAO report also makes it clear that some fundamental changes are necessary to improve the quality and reliability of the agency's service to the public. To effect those changes will require significant investment, and that investment is the reason for the increase in the passport fee, given that successive Governments have rightly determined that the agency must be self-financing.
The passport service became an executive agency in 1991, a change that has undoubtedly delivered improvements. Although the agency has been successful in driving down unit costs, its record for customer service has been less consistent. As the NAO report makes it clear, some of the causes of last summer's problems were deep-rooted. Although the agency has sought to reduce the maximum time taken to process applications from the four-week norm in 1991, it has had problems in consistently delivering the more recent two-week target.
From the early 1990s until last summer, the time taken to process applications has risen significantly above two weeks to a maximum of about four weeks in the busy season each year. As a result, there have been queues at passport offices each summer and increasing problems in responding to a rising volume of telephone inquiries.
Our strategy for the agency takes full account of the NAO report and seeks to deal with those problems. New performance targets are to be set to ensure that the two-week turnround means what it says throughout the year. To ensure that the agency can, in practice, meet those targets, I have agreed to increase its capacity by 25 per cent. to enable it to issue an additional 1.3 million passports each year. That extra capacity will be met by the opening of a new regional office for the north-east of England and by a 30 per cent. expansion of the existing Peterborough office. The new north-east office will

create 500 additional jobs and be based in Durham. The Peterborough expansion will mean the creation of an extra 100 jobs.
Other improvements are to be made. From March next year, there will be earlier opening and later closing for all the agency's offices, and Saturday opening as well. That is aimed to deliver a 45-minute maximum waiting target. The renovation of public counter areas in all offices will take place. From next July, a new public counter service will be provided at the new office in Durham. The London passport office will be relocated in spring 2001 to Bridge place, adjacent to Victoria station, where there will be major improvements in facilities for the public. The forms and accompanying notes are to be redesigned to make them more customer-friendly and to reduce error rates. Payment options will be improved and the quality of the telephone inquiry service is being raised.
A new call centre is being established in Bristol involving the creation of a further 60 jobs. The agency is being set a target of answering 90 per cent. of calls within 20 seconds, seven days a week, throughout the year. No more than one call in 50 should receive an engaged tone even at the busiest time of year. Demand forecasting and contingency and manpower planning are being strengthened to ensure that the agency can cope better with unexpected fluctuations of demand and other uncertainties in the process.
Changes have been made to improve the operation of the new computer system, but only when Ministers and the new chief executive are satisfied with the productivity of the new system as implemented at Newport and Liverpool will that system be extended to the other offices, and then only on a phased basis.
Altogether, that investment will cost an estimated £25 million per year. As I have already informed the House, the fee for a standard adult passport with 10-year validity will therefore be increased by £7 to £28. The fee for a child's passport for five years will be increased by £3.80 to £14.80. The fee for amending a passport will be increased by £6 to £17. The additional fee for customers seeking a personal service at the agency's offices will be increased by £2 to £12. My right hon. Friend the Foreign Secretary has decided that the higher fees that the Foreign and Commonwealth Office charges for passports issued by its British posts abroad will also increase. All those changes will come into effect on Thursday 16 December.
I naturally understand that fee increases are never popular. However, the increases have been restricted to the minimum that we judge necessary to ensure that the crucial improvements that I have described are delivered. I do not anticipate the need for any further increase in fees for at least two years.
Even with the increase, the fee for a British passport is among the lowest in the world and will remain well below the level of other countries where, like the UK, there is no taxpayer subsidy. For example, the equivalent 10-year adult passport fee is £34.50 in the United States, £46 in Canada, £47.50 in Australia and £74 in France.
The fee increase should ensure that the agency is put on a proper financial footing and is able to put in train the essential improvements to customer service. It will help to ensure that this year's problems do not recur, that the


modernisation programme is driven forward and that the agency is able to provide a significantly improved service to the public.

Miss Ann Widdecombe: When will the right hon. Gentleman stop persecuting the ordinary applicant for a British passport? His announcements today, which will come into effect on 16 December, will do nothing other than convince the average applicant that the spirit of Ebenezer Scrooge lives on. Will he confirm that it will now cost a family consisting of mother, father and two children £85 for their passports; that that is an increase of one third, or £21; and that, for those seeking a simple amendment to a passport, the increase is more than 50 per cent?
Will the right hon. Gentleman confirm that the new computer system was chosen and signed for by the Under-Secretary of State for Home Department, the hon. Member for North Warwickshire (Mr. O'Brien), and that, according to a National Audit Office report, the new system will deliver no more than the old system was capable of delivering?
Does the right hon. Gentleman to this day take any direct responsibility for the fiasco that arose over the summer, given the decision to implement the new rules on child passports at the same time as the new computer system was being installed? We are now told, moreover, that the new computer system was not really going to do anything more than the old system.
The right hon. Gentleman mentioned efficiency savings. Will he confirm that the background papers—which he has given me with the statement, and for which I thank him—suggest that there will be no efficiency savings in the years 2000 or 2001? Are we therefore to believe that none of the fee increase is to pay for the past fiasco, as there will be no efficiency savings for at least two years?
Is the right hon. Gentleman aware that, despite his own assertion that the Passport Agency's revised business plan was considered on 27 September by his advisory board, two months later, on 23 November, his own Minister in the Lords was claiming not to have seen it? That is of course the same Minister who recently announced in another place a set of police figures which, days earlier, had been repudiated by the Home Secretary.
I have to ask the right hon. Gentleman, and not for the first time, what is going on in the Home Office. I know that he will tell me, as he has done in the past, that it is business as usual. He will be aware that I have always eschewed the practice of calling for ministerial resignations—[Laughter.] I have. However, in the light of what he has told the House, and the costs to British passport applicants of putting right the results of the fiasco that he—and he alone by his decisions—produced, does he not think that the time has come at least to consider the position of the Parliamentary Under-Secretaries of State for Home Affairs, the hon. Member for North Warwickshire (Mr. O'Brien) and Lord Bassam?

Mr. Straw: As I have always explained to the House, I have never suggested that my stewardship of the Department would be perfect. However, my stewardship of the Home Office is different in at least two important respects from that of the previous Administration.
The first major difference is that we as Ministers accept responsibility for anything that happens in our Department, including the Department's agencies. That contrasts very starkly with the way in which the right hon. Lady and other Ministers in the previous Government used to try to dance on the head of a pin to distinguish between policy, for which they were responsible, and operations, for which someone else was always to blame.
I have already said that I was responsible for the problems that arose last summer—I told the House that at the end of June. I am very sorry that the problems happened, and we sought immediately to put them right. I will take criticism from a great many people about what happened, but I will not take it from someone who served in the Home Office in the previous Administration.
I remind the right hon. Member for Maidstone and The Weald (Miss Widdecombe) that the worst delays last summer—which were totally unacceptable—were 50 working days. That compares favourably with what happened when she and her right hon. Friends introduced a new computer system in 1989–90 when—thanks to industrial action, which they provoked, the delays were not 50 days, but 95 days. It then took four and a half months.
I regret fee increases of this kind, and the fact that holidaymakers will have to pay for them. However, our judgment has been that we must avoid a recurrence of the difficulties which arose last year. The NAO report—for which my colleagues and I were grateful—exposed the fact that, although the Passport Agency had been successful in driving down unit costs, underlying problems were in some ways obscured by that apparent success. We therefore had to increase capacity and ensure that other improvements were made to the standard of service offered to the public.
The right hon. Member for Maidstone and The Weald asked about efficiency savings. I hope that she is not challenging my word on this: as I have said, the £12.5 million cost identified as that arising from last summer's problems will be met not from a fee increase but from efficiency savings.

Mr. Robin Corbett: Does my right hon. Friend understand that, although no one likes fee increases, there will be a general welcome if—on the back of the extra investment that he has announced this afternoon—there is an improvement in the efficiency of the service? May I tell him also that he will be judged on the way in which the service is delivered or not? Will he think about a simpler and cheaper system of travel document for those who wish to take holidays only in other European Union countries?

Mr. Straw: I am grateful to my hon. Friend for his comments. Our judgment—which I hope will be shared by the House, despite the increase—is that what holidaymakers and other travellers want above all is a guarantee that when they apply for a passport, they get one. In addition, to fit in with differences in working times and so on, if someone phones up outside traditional office hours, they will get a proper answer, and a swifter answer than before. I accept that we and the agency will be judged on whether the improvements in service are delivered.
There was a modified and simpler form of travel document, which was withdrawn—I believe correctly—by the previous Administration in 1995 or 1996. That was


a British visitor's passport, which was available over the counter in post offices. The difficulty with it was that it was insecure and open to forgery and other fraud. For that reason, it had to be withdrawn.

Mr. Simon Hughes: I welcome the proposals for a more customer-friendly system, and I ask the Home Secretary to pass on our thanks to the staff of the Passport Agency, who have recovered speedily from the fiasco of the summer and are now processing passports quickly. Clearly, a one-third increase is not a Christmas present to which anyone will look forward. Has such a large increase ever been announced in the history of passport charges imposed by Government?
How can the Home Secretary say—as he did in a letter the other day—that the National Audit Office has said that in recent years the Passport Agency has achieved great efficiency savings, while at the same time saying that there is scope for further efficiency savings to raise the £12 million-odd with which he says the increased passport fee has nothing to do?
Given that the blessed computer system appears to be two years behind schedule and £20 million overrun in costs and that, according to answers that the Home Secretary gave me, 13 of the 17 Home Office main IT projects are either overrun in cost or behind schedule or both, can the contracts for those 17 systems be put in the public domain—this follows the question asked earlier by my hon. Friend the Member for Somerton and Frome (Mr. Heath)—so that there is no secrecy and we can judge whether the blame lies with the Home Office or the IT company or both?

Mr. Straw: I accept that the increases are unpalatable, but they are not dissimilar to increases that took place under the previous Administration. For example, the fee for a driving licence rose in 1996 from £21 to £27. The percentage increase that the previous Administration imposed when they increased the passport fee by £4, from £11 to £15, was bigger than the one that I have just announced.
We are confident that we can meet the demand for efficiency savings over a period—more than one or two years—and that they will be achievable within the business plan, not least because of a high and improved level of service.
The issue of contracts is difficult. I will certainly consider what further information can be provided. When I was in opposition, I took the view that the maximum information about contracts should be provided, and I have not changed that view, but there are issues of commercial confidentiality involved and, understandably, companies signing contracts with public authorities—sometimes for justifiable reasons, but sometimes for unjustifiable reasons—want parts of those contracts to remain confidential. The NAO report gives considerable information about the income forgone that Siemens has had to take, as well as the Passport Agency.

Mr. Peter Bradley (The Wrekin): I welcome the measures that my right hon. Friend took earlier this year and the confirmation that they have been effective in shifting the backlog, and I am glad that applications now take an average of 10 days, but that is in sharp contrast

to the response from the chief executive of the UKPA to correspondence. I wrote to him on 1 November and 35 days later I am still waiting for so much as an acknowledgment. I wrote on behalf of a constituent seeking compensation for a cancelled holiday. How many such cases have been settled and how many remain outstanding? If necessary, will my right hon. Friend take steps to ensure that the process is accelerated?

Mr. Straw: I will follow up the point about correspondence, because letters should be replied to far more promptly than that.
Total compensation paid to members of the public for missed travel dates and other expenses amounted at the end of October to £161,000, but it is likely to rise further as outstanding claims are settled.

Sir Brian Mawhinney: The hon. Member for Peterborough (Mrs. Brinton) and I will welcome the extra jobs in Peterborough. Has the Home Secretary yet written personally to those who work in the Peterborough passport office to apologise for the anger and opprobrium that they had to suffer last summer as a result of his incompetence? Is it not true that that incompetence is in part the reason for the swingeing increases announced today?

Mr. Straw: The Under-Secretary, my hon. Friend the Member for North Warwickshire (Mr. O'Brien), went one better than simply writing to the staff at Peterborough. He went there and thanked them. I think—I am not absolutely sure, so I will check—that I wrote a message to staff thanking them very much for the unquestionable work that they did and for the fact that, as I observed in passport office front counters in London and Liverpool, they had to deal with a lot of members of the public who were understandably very cross and upset. I thanked them personally and I believe that I did so in writing as well.

Mrs. Helen Brinton: I warmly welcome my right hon. Friend's announcement. Does he agree that the 100 welcome new jobs and the drop in unemployment in Peterborough from 11.4 per cent. when we took over in 1997 to only 6.3 per cent. today, after two years of Labour Government, is evidence of the Government's excellent record on getting people back to work? [Interruption.] Opposition Members may jeer and shake their heads, but they cannot deny that under this Government unemployment is at a record low and the country's finances are healthier than they ever were under the Tories. Is it not exactly that economic prosperity and stability that is allowing the sort of investment that my right hon. Friend has just announced?

Mr. Straw: I thank my hon. Friend for those remarks. Although in some ways I regret the circumstances, I am delighted that that change in the structure of, and the investment in, the United Kingdom Passport Agency will lead to the creation of an additional 100 jobs in my hon. Friend's constituency and another 500 jobs in Durham city, in County Durham. Of course I accept what my hon. Friend says about the dramatic improvement in prosperity and the reduction in unemployment that has taken place in Peterborough under my right hon. Friend the Chancellor's stewardship of the economy.

Mr. Peter Brooke: Although I welcome the fact that the


Passport Agency seems here a painful inch to gain—to misquote Clough—will the Home Secretary turn his mind to the travel section of the immigration and nationality directorate, from which we can get neither particular answers on behalf of constituents nor general answers about the present state of the section?

Mr. Straw: If the right hon. Gentleman is talking about the issue of travel documents for stateless people, I can tell him that as a result of changes that have been made in the production process at Croydon, output of those documents has increased by some 500 per cent. That is a dramatic change. As far as other aspects of the administration of the immigration and nationality directorate are concerned, we are putting extra staff into Croydon. I understand the problems that have arisen, because—like the right hon. Gentleman—I have a large constituency case load of people who have tried to correspond with Croydon. I have asked the office to ensure that I get no better treatment than anyone else, and I can guarantee that I do not.

Mr. Dale Campbell-Savours: My right hon. Friend, in reply to my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett), the new Chairman of the Select Committee on Home Affairs, pointed to difficulties with the British visitor's passport, which led to its withdrawal in 1995. Will my right hon. Friend revisit that decision? Why do not we take a pan-European approach and adopt a national identity card that would include data such as medical data and could then—subject to negotiation—be used throughout the European Union? Such a card is inevitable, so why not grasp the nettle now and seek its early introduction?

Mr. Straw: I fully understand that Members on both sides of the House have varying views on the issue of national identity cards. I have examined the issue with great care, and our view is that a national identity card would not be appropriate. It is a different matter to improve national records, which would be of some assistance. Part of the problem of having a national identity card, if we take the example of member states of the Schengen system, is that it requires a change in the powers of the police in place of border controls, so that they can demand the production of the card without any other cause. That would not be acceptable to British citizens, and our approach of having proper border controls is more effective in many respects. Of course, I am willing to continue to engage in the debate with my hon. Friend.

Sir Sydney Chapman: Would the Home Secretary consider what appears to be an unfair situation? Many thousands of us—I declare an interest—sought to have our passports renewed earlier this year and were given, exceptionally, a two-year extension. Does the right hon. Gentleman think it right that those people should have to pay the new fee for renewal of their passports instead of the fee they would have paid had they been able to have it renewed earlier?

Mr. Straw: We made that arrangement to relieve the pressure on passport offices, and it was successful.

The result for the hon. Gentleman is that he has had two years' free extension of his passport. I do not begrudge him that, but it is not too bad a result.

Mr. Paul Flynn: Will my right hon. Friend exonerate those hundreds of my constituents who work in the Newport passport office from any blame for last summer's chaos? They—and staff in other passport offices elsewhere—faced the brunt of public criticism and responded magnificently, working long hours for little reward. They will be disappointed that their service and loyalty were not recognised today with the announcement that more people would be employed at the office. They will be further disappointed if the promised efficiencies mean that their jobs are under threat.
Does not the passport saga shake my right hon. Friend's faith in the omnipotence of high-tech and in the value of public-private partnerships? We are told that those partnerships represent the way forward, and that many public service activities must be outsourced to the private sector. Could not more efficiencies be gained through insourcing, so that work carried out in the public sector could be enhanced by the taking on of work that is performed less efficiently in the private sector?

Mr. Straw: I want to do far more than exonerate staff in the Newport passport office and elsewhere: I want to praise them for the way in which they dealt with a very difficult problem.
My hon. Friend will know that there is a history of large-scale computer systems not quite working out according to plan, in the private sector as well as in the public sector. At all stages, we have to try and learn from what has happened. I refer my hon. Friend to what happened with the introduction of the new payments system at the stock exchange, which was an entirely private sector operation. I am glad to see wry smiles on the faces of the hon. Members for West Dorset (Mr. Letwin) and for Arundel and South Downs (Mr. Flight), as hundreds of millions of pounds were wasted when the system at the centre of our economic arrangements almost collapsed.
When it comes to new information technology systems, the precise boundary between private and public sectors can be arguable. However, because the Government are not in the business of computer manufacture and supply and have no plans to go into that business, we must have a relationship with the private sector. The decision to be made has to do with what the best relationship is, and whether it is most likely to ensure that the private sector also bears part of the risk involved with the systems that it supplies.

Mr. David Davis (Haltemprice and Howden): I thank the Home Secretary for taking so seriously the work done by the National Audit Office in this matter. I also welcome the fact that the cost of this year's shambles—some £12 million—is to be met out of efficiency savings, rather than by the taxpayer or the holidaymaker. However, I presume that those efficiency savings will be on-going, whereas the cost was a one-off. I also presume that the management of the agency will make further efficiency savings, and that unit costs will fall as volumes increase and capacity use rises. I also believe that, because the volumes involved are higher than when the contract with Siemens was first negotiated, that contract should be


renegotiated. Will the Home Secretary undertake to ensure that the Passport Agency pursues all those cost savings, and that it will return the money saved to the holidaymaker in the form of reduced fees in the future?

Mr. Straw: I thank the right hon. Gentleman for what he said. We certainly take the NAO's work seriously, and I am grateful for the insights that it gave me into the working of the Passport Agency and the problems that had to be dealt with to ensure that the agency was put on a proper and sound footing.
The right hon. Gentleman asked about the Siemens contract. Discussions with that company about the nature of the relationship are continuing, and I shall write to the right hon. Gentleman about that. I have given the best information that I can on the overall cost of the investment, which is running at about £24 million, and have explained the consequent need for a fee increase. Of course it is our hope that we can get unit costs down, but such a reduction will be from a higher level than previously, as we are asking customers to pay for a higher level of service. Whether we can, as the right hon. Gentleman suggests, achieve a virtuous circle that would allow us to reduce the fee in future, rather than its rising, is something about which I am a little sceptical, but we live in hope. If the right hon. Gentleman wants more information, I shall be happy to write to him.

Mr. Andrew Miller: I, too, have a vested interest, as my passport appears to have been stolen at Heathrow last Wednesday. I should say how extraordinarily efficient and courteous were both our immigration service and that of the United States of America. Our embassy in Washington was also extremely helpful, as were the staff of British Airways.
Will my right hon. Friend ensure maximum co-operation with the Post Office so that the widest availability of passport application forms can be achieved? That would be a practical way in which to help rural post offices while also providing a better service to constituents in rural areas.

Mr. Straw: I thank my hon. Friend for those remarks. Staff in the immigration and nationality directorate, the immigration service and the Passport Agency are more used to receiving brickbats than bouquets, and it is nice to hear hon. Members praise them, entirely justifiably. I shall ensure that my hon. Friend's compliments are passed on.
We shall ensure better availability of passport forms. An arrangement with partners of the Passport Agency—principally, though not exclusively, the Post Office—allows customers to pay an additional fee to ensure that their applications are checked for errors before going into the system earlier than would otherwise be the case. The fee is £3.25, and there will be no increase on 16 December, although it may be increased next April.

Mr. Michael Jack (Fylde): Some people will see today's swingeing increase in charges as the imposition of a new tax—an identity tax. The Home Secretary has announced the creation of 600 new jobs at a cost of £250,000 each every year to improve service in the Passport Agency. If the agency's time targets are not met, what compensation will be available to applicants?

Mr. Straw: The Conservatives are a bit like the Bourbons, except that they have forgotten everything and

learned nothing. As the right hon. Gentleman is obviously suffering from amnesia, I remind him that he was a Treasury Minister when the Conservatives raised taxes not once or twice but 22 times. One of those taxes was an airport tax—a real tax on travellers. Today's increase is not a tax but a raised fee to provide an improved service.

Mr. Quentin Davies (Grantham and Stamford): Does the right hon. Gentleman realise that his use of "investment" must be spurious? The word implies positive anticipated return by efficiency savings or some other means. If there are genuine efficiency savings, my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) is right to say that the unit cost of providing the service should come down. The fact that the Home Secretary does not anticipate a reduction in cost means that this measure is not an investment. He is misusing language. Would it not be good for the country if he thought a little more rigorously, which might help him to act more straightforwardly?

Mr. Straw: I bow to the hon. Gentleman's superior business acumen, but there is no question but that this is an investment of £24 million a year to provide an improved level of service. It is there to deal with the underlying problems that were properly identified by the National Audit Office and the Public Accounts Committee—I am grateful to them. Although the public will not find the increases especially palatable—neither do I—I think that they would prefer a balance so that, for a relatively higher fee, they are guaranteed a proper service with a swifter response from the agency. Furthermore, they will receive a modern service that takes account of the fact that people no longer work nine to five; they work different hours and they want a different response from public services.

Mr. John Bercow: May I take this opportunity to thank the Home Secretary for his assistance in the eventual processing of passport applications from my constituents Sarah Crisp, Elizabeth Scott and Alice Wright, and, through him, thank the UK Passport Agency? However, in view of the swingeing increases in fees that he has announced, will he give me the assurance, which I have previously sought but which was not forthcoming, that where an individual is obliged to make an initial or an extra visit in person to a passport office as a direct result of the tardiness or incompetence of the UK Passport Agency, that individual's reasonable travel costs will be reimbursed without question?

Angela Smith (Basildon): They are.

Mr. Bercow: They are not.

Mr. Straw: It is my recollection that, during the summer, if individuals who applied for compensation had had to make a second or a third unavoidable journey to a passport office, that was included in the payment that they received. If I am wrong about that, I shall write to the hon. Gentleman.
We very much hope that the changes will ensure that the turnround is effective even at times of greatly increased demand. I am extremely grateful to the


hon. Gentleman not only for his words of thanks to me—I do not deserve them—but to the staff of the agency, who do deserve them.

Mr. Owen Paterson: The Home Secretary's reply to my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) was limp-wristed and woolly. If there is major investment in a new system, there must be efficiency savings. Will the right hon. Gentleman make it his job to ensure that savings are passed on to the afflicted members of the public on whom today's huge increase has been imposed?

Mr. Straw: As I pointed out, this increase, proportionately, is marginally less than that imposed by the Conservative Administration in 1983. Although I fully understand that it will not be popular with members of the public, the last people—as ever—who should complain about an increase of that size are members of the Conservative party. If there are savings in the future that can properly be passed on to the members of the public, they will be passed on. My answer to the right hon. Member for Haltemprice and Howden was not limp-wristed; it was careful. In the House of Commons it is extremely important that we do not give undertakings that we cannot deliver.

Mr. Stephen O'Brien (Eddisbury): As the Government try so readily to borrow management speak and business speak, is the irony lost on the Home Secretary that the Passport Agency holds a monopolistic position—by definition, one cannot obtain a passport from anywhere else—and that an inflationary increase of this size would, by any test, be an abuse of a monopolistic position? If the right hon. Gentleman is to borrow from business speak, perhaps he should now consider that what you measure is what you get. As part of the thanks to the Passport Agency staff—expressed by Members on both sides of the House—perhaps the staff should be given an incentive bonus payment for what they have managed to do. That would also ensure that they are incentivised in future.

Mr. Straw: At the end of this debate on the statement, and after the preceding Home Office Question Time, we shall, as usual, go away and add up the total costs to which Opposition Members have committed themselves—against a background in which they have damned our spending as "reckless".
Let me make two points to the hon. Gentleman. The first is that the staff of the Passport Agency worked extremely hard last summer, and, in recognition of that, they rightly received significant overtime payments. Secondly, in spotting the fact that the issuing of passports is a monopoly, the hon. Gentleman displays those economic insights known only to Conservative Members. The issue of passports is a monopoly; I know of nowhere in the world where it is other than a monopoly exercised by the state.

Points of Order

Mrs. Angela Browning: On a point of order, Madam Speaker. Following the serious announcement at the weekend that the World Trade Organisation talks had collapsed in a shambles and today's press announcements that the British Secretary of State for Trade and Industry is to take a lead role in restoring the situation, have you received any request from the right hon. Gentleman to the effect that he wishes to come to the House to share with us and, through us, with British business, the way in which the Government intend to take the lead role in restoring what is now a very serious matter?

Madam Speaker: No. I have not been informed by Ministers that they seek to make a statement. Perhaps I can refer the hon. Lady to the Order Paper for Thursday of this week when, on a motion for the Adjournment, the very subject in which she is interested will be there for debate by the entire House.

Mr. Alan Williams: On a point of order, Madam Speaker. You will be aware that hon. Members from both sides of the House may seek to amend on a non-political basis the Government Resources and Accounts Bill so as to guarantee the rights of the House. You will also know that the Bill's long title says that it will
Make provision about government resources and accounts … and for connected purposes.
It has been intimated that there is some confusion at an official level and that some officials think that we are circumscribed by the long title. Will you confirm that the reason why the long title is the last part of a Bill to face amendment is to ensure that the long title can be brought into line with amendments that have been made in Committee and on Report?

Madam Speaker: I am grateful to the right hon. Gentleman for giving me a little notice of his point of order. The House knows, however, that the Speaker never gives hypothetical rulings. By inviting me to give a firm ruling at this stage on the technical scope of the Bill, he is effectively inviting me to prejudice decisions that have to be made by the Chairman of the Standing Committee and not by me. I suggest that he uses his skill, his experience and, I know, his ingenuity as well as his knowledge of the Clerks in the Public Bill Office, to secure the objectives that he has in mind.

Dr. Liam Fox: On a point of order, Madam Speaker. You will be aware from reports in the written press and the broadcast media of elderly patients having food and water withheld as a result of the lack of national health service beds. Those reports will have been met with horror and disbelief inside the House and beyond. Given that they have come from eminent consultants and from patients' groups, there needs to be a full inquiry. Should not the Secretary of State for Health ask to make a statement on that matter, and could not time be made available for it during today's proceedings given that people must now wonder what sort of culture we live


in when all the stops can be pulled out to provide a dome for our entertainment but when the necessities of life are withheld from our elderly patients?

Madam Speaker: As the hon. Gentleman will appreciate, I shall not comment on the political issue that he has raised, but I can tell him, as I am sure he knows, that no Minister is coming to the House today to make a statement on it. May I respectfully draw his attention and that of his hon. Friends to the fact that, tomorrow, they can table parliamentary questions to the Secretary of State for Health, for answer before the House rises for the Christmas recess?

Mr. Peter Atkinson: On a point of order, Madam Speaker. At about half-past 10 this morning, a Cabinet Office report relating to the north-south divide was given to the media. At 4 o'clock this afternoon, it was still not available in the Vote Office, although throughout the day the media have been asking Members with a constituency interest in the north for their comments. Could you in future ensure that the Cabinet Office makes such documents available to Members at the same time as it does to the media?

Madam Speaker: It probably is an important document, and I shall consider the matter. This is the first time I have been made aware of the document, but if the hon. Gentleman leaves the matter with me, I shall make some inquiries.

Orders of the Day — Government Resources and Accounts Bill

Order for Second Reading read.

Madam Speaker: I have selected the amendment in the name of the Leader of the Opposition.

The Chief Secretary to the Treasury (Mr. Andrew Smith): I beg to move, That the Bill be now read a Second time.
The Bill is a major milestone on the way to full implementation of the biggest reform and modernisation of the management of the country's public finances since Gladstone's time. Resource accounting and budgeting is a vital part of our modernisation agenda and demonstrates the Government's commitment to introduce best practice accounting methods in line with the code for fiscal stability.
Before I go into the detail of the Bill, let me say that it is good if we can describe what Parliament does in everyday terms, wherever possible. That is, I have to say, more of a challenge with this Bill than it is with most. We are shifting the focus of how we plan and judge Government spending from looking at the cash that we spend each year to looking at what the public get for their money in that year. We are looking not only at the supermarket receipt, but at what is in the shopping trolley.
Cash controls will, of course, remain, but we shall also have proper measures of the resources used up, not just of the money spent. The accounts will be more recognisable to those familiar with private sector accounts; for example, the equivalents of profit and loss, cashflow and a balance sheet. One could say that we are putting the Government's accounts on a more business-like footing.
The Bill delivers four major reforms. First, it introduces resource accounting and budgeting into the Government accounts and modernises the operation of other aspects of the Exchequer and audit Acts. Secondly, it improves the way in which Parliament votes on and scrutinises public spending, with proper measurement of the full economic costs of Government activities, better treatment of capital spending and systematic reporting of the allocation of resources to objectives.
Thirdly, the Bill provides enabling legislation for the preparation and audit of consolidated accounts for the whole public sector. Fourthly, it enables us to set up Partnerships UK, a new body designed to make the public sector a better client in public finance initiative and public-private partnership deals.

Mr. Dale Campbell-Savours: I am having difficulty with the Bill. Having spent 11 years on the Public Accounts Committee—I believe that I left the Committee in 1991—I have taken note of a statement by the National Audit Office, which is headed by an Officer of Parliament, the Comptroller and Auditor General. The statement says that, as currently drafted, the Bill threatens to weaken the Comptroller and Auditor General's independence and his relationship to Parliament. I regard that as a major intervention by the National Audit Office.
From what I hear from my hon. Friends, who are all in favour of a shift to resource accounting, they, like me—I have spent the weekend reading papers on the subject—are profoundly concerned about the speed with which the Bill is being introduced, given that there are clear reservations throughout the National Audit Office. The NAO is concerned that Departments are not ready to accept the legislation because they have not fulfilled all the requirements placed on them and on which the Comptroller and Auditor General reported to the Public Accounts Committee. What is happening? If the NAO is resisting, why are we proceeding with the Bill in this way?

Mr. Smith: Obviously, I defer to the experience and knowledge of my hon. Friend and our colleagues on the Public Accounts Committee. They have made an invaluable contribution to the development of the resource accounting and budgeting approach. However, it is important to remember that the whole purpose of the Bill is to place the accounting and budgeting process on a resources basis, not to change the audit arrangements. The aim is broadly to import existing audit arrangements and powers—no more and no less—into the new approach. I am happy to undertake to continue discussion with the Public Accounts Committee and to listen carefully to anything that the National Audit Office and the Comptroller and Auditor General have to say about the specific points raised by my hon. Friend.
As my hon. Friend will be aware, the development of resource accounting and budgeting has had to pass through certain trigger points, according to which we are on course. Should any Department not be ready at trigger point 3, which is currently being audited by the NAO, it will have to wait a year before it can have audited resource accounts. However, I have no reason to expect that to happen.
Work on this approach to accounting and budgeting has a fairly long, bipartisan history. It began in 1994, under the previous Government, and has been taken up with enthusiasm by the current Government. I hope that our proposals to make the change to resource accounting and budgeting will be welcomed by hon. Members on both sides of the House. The House will be glad to hear that implementation is on schedule and that all Departments are on course to prepare audited resource accounts for the current financial year.

Mr. John Bercow: Given Ministers' enthusiasm for redesignating Government expenditures as tax credits, will the Chief Secretary confirm that the Bill confers on him and his colleagues unfettered discretion in future to fiddle the figures?

Mr. Smith: Absolutely not. An attack couched in that tone by an Opposition Member is unfortunate in respect of a Bill that has a bipartisan history and gives effect to principles which hon. Members on both sides acknowledge make good sense. The figures produced as we carry out our responsibilities under the Bill will be subject to the normal audit arrangements. The standards to be applied are generally accepted accounting practice and have been informed by the advice of the independent Financial Reporting Advisory Board. That should give the

hon. Gentleman the assurance that he seeks. The Bill is not about fiddling the figures, but about putting our accounts on an accruals, rather than a cash, basis. Cash controls currently in operation will remain, and it will be possible to reconcile the accounts to cash control totals. There is no question of fiddling the figures.

Mr. Edward Davey (Kingston and Surbiton): Clause 5(2) gives the Treasury the power to direct in respect of accounts, and hon. Members on both sides of the House are concerned about the possibility of that discretionary power being used improperly. Will the right hon. Gentleman consider establishing an independent body to set and determine accounting standards?

Mr. Smith: The Bill confers no direction powers on the Treasury that do not already exist under current legislation; the Bill merely transposes those powers. The powers are subject to all the normal protections and safeguards in the interests of the House, the public and parliamentary scrutiny. The idea that the Treasury will have unfettered discretion is nonsense: if anything, the Bill imposes slightly greater constraints on the Treasury than the existing arrangements.

Mr. Andrew Tyrie (Chichester): Given that explanation, why does clause 10(2) state:
The accounts shall … contain such information in such form as the Treasury thinks fit"?

Mr. Smith: Again, the Bill simply transposes and updates existing powers to the accruals format.
The accounts will be scrutinised, undertaken to professional standards and subject to independent oversight. That is accepted not only by Members of Parliament with a knowledge of such matters, but by those who follow such matters closely from outside the House. As I have said, everything in the Bill is in line with generally accepted accounting procedures. That is the basis on which we should proceed. We are mindful of the importance of our accountability to the House and the proper powers of the House over supply.
I shall say more about how resource accounting works.

Mr. Campbell-Savours: I am sorry to press my right hon. Friend again. He referred to the powers of the House over supply. The National Audit Office has asked that the Bill
shall not have legislative effect until the Treasury provides the Committee of Public Accounts with appropriate assurances that all Departments are prepared fully for the change and the Committee has signified that it is content.
Is that the Government's position as well? Do the Government intend to listen to the Public Accounts Committee on this matter and not proceed with implementation in all Departments before the PAC has signified that it is content?

Mr. Smith: Yes. As I said earlier, I am ready to discuss these matters with the PAC whenever it sees fit. However, the existing arrangements already provide for the PAC to consider, for example, the Treasury's six-monthly memorandums on progress, and the PAC does so. I would expect the next memorandum, which will appear in January or February of next year, to report to the PAC on


progress in relation to trigger point 3, which is the readiness of the Departments to which my hon. Friend the Member for Workington (Mr. Campbell-Savours) refers.

Mr. David Davis: I want to make two points to the Chief Secretary. First, it is disappointing that the trigger-point structure is not implicit in the Bill. It is a Treasury decision rather than anybody else's. Secondly—this is not a synthetic intervention—in August 1999, the National Audit Office was expecting 53 dry-run accounts, but received only 22. The Chief Secretary is right to say that this is an important reform, and it would be a disaster if it got off to a broken start.

Mr. Smith: I acknowledge, as does the right hon. Gentleman—notably in his capacity as Chairman of the PAC—the importance of having a thorough procedure. A thorough procedure is in place and the Government take it extremely seriously, notwithstanding the status of the trigger-point mechanism that he describes. I assure the right hon. Gentleman that while the system is being introduced I shall ensure that the mechanism is adhered to in the interest of proper accountability. The system needs to command the confidence of Parliament as well as the wider public, including people of all political persuasions.
Resource accounting applies accruals accounting techniques to central Government by focusing on resources consumed rather than cash spent. The main change, therefore, is to the treatment of fixed assets. Resource accounting will reflect the costs of consuming fixed assets and of holding them through a charge for depreciation, and the cost of capital, rather than just the cost of acquisition as under a cash-based system of accounts. As I have said, resource accounting is based on generally accepted accounting practice in the United Kingdom. It reflects the accounting and disclosure requirements issued by the Accounting Standards Board and the Companies Acts to the extent that that is appropriate for central Government.
Resource accounting will form the basis of resource budgeting so that we can plan and control central Government expenditure on an accruals basis. Subject to parliamentary approval, supply will be voted on an accruals basis under resource accounting and budgeting, and resource accounts will replace appropriation accounts but will fulfil essentially the same function.
Resource accounting and budgeting applies the private sector's best financial reporting practices to central Government so that, for the first time, we shall produce the equivalent of the main financial statements from commercial accounts. That is, a balance sheet, an operating cost statement, a statement of recognised gains and losses and a cash flow statement.
Of course, resource accounting and budgeting goes even further than that. Under the new system, there will be a summary of resource outturns reflecting parliamentary control and, critically, a statement of resources by departmental aims and objectives under their public service agreements. That will enable us to focus on outcomes, not just on inputs—on the products of our spending, not just the size of our investment. We can thereby ensure that future public spending is planned and controlled prudently.
Throughout the life of the resource accounting and budgeting project, there has been regular contact between the Treasury and Parliament. I referred earlier to some of it. It included the publication, under the previous Government, of a Green Paper in July 1994 and a White Paper in 1995, the submission of memorandums to Parliament, parliamentary hearings and subsequent publication by the Public Accounts Committee and Treasury Joint Committee. The matter was also covered in the Procedure Committee.
All along the way, Parliament has played an important role in the development of this new and important process. I can assure the House that reporting to Parliament will continue throughout the implementation phase. As the availability and relevance of information of interest to Parliament increases, memorandums will be submitted to provide regular updates on policy and implementation.
I am sorry that timing difficulties denied us the opportunity to consult Parliament on the Bill in advance, as we had intended, but last March the Treasury submitted a memorandum to the Public Accounts, Treasury and Procedure Committees, setting out the Government's intentions for the legislation.
Resource accounting and budgeting makes two important improvements to the outdated and outmoded present system of cash-based accounting. First, it will ensure that the full economic cost of the Government's activities is measured properly by including costs such as capital consumption, which are not reflected in cash-based accounts. It will also match the costs to the right time period, providing the Government with a better basis for allocating resources. Secondly, it will bring about improvements in the treatment of capital spending, so that instead of simply identifying the cost in full in the year of acquisition, the cost of capital will be spread over its useful life, which is obviously sensible.
In the longer term, our aim is for resource accounting and budgeting to lead to whole of Government accounts, which are the natural next step. That will enable us to fulfil the commitment given in the code for fiscal stability to produce accounts for the whole public sector on a consolidated basis, if possible.

Mr. Tyrie: Will that basis extend to defence capital spending?

Mr. Smith: Yes, indeed, it will.
That will enable us, as I said, to fulfil our commitments under the code for fiscal stability. Moreover, audited w hole of Government accounts will improve the information available to support the control and monitoring of fiscal policy. The accounts will also improve accountability to Parliament and provide greater transparency to taxpayers. However, to produce whole of Government accounts fully audited, we will need greater conformity of accounting policies, systems and procedures, and those are major challenges.
The Government have decided to adopt a staged approach. We shall first concentrate on delivering audited accounts covering central Government—Departments, agencies and non-departmental public bodies—and only then will we be in a position to make a final decision to extend coverage. Incidentally, that staged approach is entirely consistent with what was said by the previous Government and with the 1995 White Paper.
The purpose of the whole of Government accounts clauses in the Bill is to enable the Treasury to prepare as efficiently as possible by adopting relevant best practice consolidation procedures used in the private sector. In particular, we want to maximise the use of electronic communication and data submission.

Mr. Davis: We all accept the importance of whole of Government accounts, and the Chief Secretary has made a good case for that. Can he explain, therefore, why for the whole of Government accounts the National Audit Office will not have absolute access to all the component parts, in the same way as it would in consolidating a company in the private sector?

Mr. Smith: Some of the bodies that are covered by whole of Government accounts have other auditing arrangements, which are set down in statute. Some are covered by the Companies Act 1989 rather than by public audit arrangements. Under the Bill, any payment that is made from the public purse can be scrutinised and followed as it is at present. As I said earlier, in introducing a reform on the scale of the Bill, we must focus on the main objective, which is to shift from cash to resource accounting. The Bill was never intended to overhaul audit arrangements, but I am happy to discuss with the Public Accounts Committee, or anyone who is interested, serious points of interest that arise on auditing.

Mr. David Davis: I shall not labour the point, but I do not want the Chief Secretary inadvertently to mislead the House. He used the phrase, "scrutinised and followed". In the private sector, a major company's auditor who has to audit the whole company is able to go into any component part. However, the National Audit Office cannot follow public money to any destination. I am sure that we shall debate the point in Committee.

Mr. Smith: Yes, I, too, am sure that we shall debate the matter in Committee. However, the Comptroller and Auditor General will certify that a true and fair record of expenditure has been kept. Accounts that have been audited—we have no reason to believe that they have been improperly—under other arrangements will be overseen. I am happy to discuss that further with the right hon. Gentleman and his colleagues.

Mr. Oliver Letwin: Can the Chief Secretary confirm that the Comptroller and Auditor General will not certify the regularity of the accounts?

Mr. Smith: The Comptroller and Auditor General will certify a true and fair record. That is a step beyond the provisions that were envisaged in a White Paper that the previous Conservative Government published in 1995. The presumption in that White Paper was of a fair basis. We have gone further than that in strengthening the certification ability of the Comptroller and Auditor General.

Mr. Robert Sheldon: I am sorry for the constant interruption, but we are considering important matters that we must clarify now, even though we wish to proceed further. The right hon. Member for

Haltemprice and Howden (Mr. Davis) made the most important point. It is not enough to certify that the money has been spent; we must ascertain how it is spent. In the interest of parliamentary accountability, the Comptroller and Auditor General needs the power to do that. That is crucial, and the Public Accounts Committee and the Public Accounts Commission are unanimous that that must be understood by everyone.

Mr. Smith: I understand the seriousness with which my right hon. Friend and his colleagues express their anxieties. I stress that the Comptroller and Auditor General and the audit architecture will be just as strong on the resource accounting and budgeting basis to which we are moving as under the current system. The Bill was not intended to overhaul public audit arrangements. I want to be open with the House: proper scrutiny is in the interests of the public and Parliament—Government and Opposition—to ensure value for money, to cut out fraud and to make sure that taxpayers' money is spent wisely and properly. We have a common interest in that, regardless of party affiliation or the issue of the moment. If there are serious grounds for reconsidering some of the audit arrangements, I am happy to discuss them. However, they are not—and were never envisaged to be—the major purpose of the Bill.

Mr. Robert Key: This is a genuine inquiry. Following on from the remarks of my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), can the Chief Secretary explain why the national health service receives special treatment? Why, for example, does clause 12 say that
the Secretary of State may give directions—
(a) specifying uses of resources which are to be, or not to be, taken into account"?
That does not seem transparent.

Mr. Smith: It is absolutely transparent, and that is why the references to the NHS are in the Bill. The finances of health authorities and primary care groups come within the central Government accounts covered by the Bill, whereas the health trusts—which have their own auditing arrangements—and local authorities and public corporations will come in during stage 2, as we move towards whole of Government accounts. It is entirely appropriate that the existing arrangements for central Government bodies, including health authorities and primary care groups, have been covered in the way that the hon. Gentleman describes—they are in the Bill.
I want to progress to the other important provision of the Bill, which paves the way for the establishment of Partnerships UK. That body is central in our drive to modernise key public services. Partnerships UK will provide greater clarity in the way that the Government do business with the private sector and make available to them the key commercial skills needed to deliver better value for money and effective investment in front-line services. It will be a new public-private partnership that will offer a long-term home to the type of deal-making skills that are presently available to the public sector only temporarily in the Treasury taskforce. It will work in the public interest and address the key weaknesses in the current public-private partnership process so that the public sector becomes a more efficient and effective client.
Over the past two and a half years, the Government have fundamentally reformed the private finance initiative by prioritising projects, ending universal testing, offering a fairer deal to staff and standardising contracts. We have streamlined the PFI and put it on a more sustainable and successful basis and the next step is to use the new PFI to drive forward our programme to modernise public services across the board. That means expanding the PFI, applying it in sectors where it has not been used extensively before and enabling smaller projects to be bundled together so that the PFI is a cost-effective option for carrying them forward. There will be new relationships with the private sector involving local authorities as part of our public-private partnership programme.

Mr. Howard Flight: Can the Chief Secretary describe precisely what assets the Government expect the PFI to have within its balance sheet when they talk of anticipating one of about £1 billion in due course?

Mr. Smith: I think I know from where the hon. Gentleman is getting his references to the £1 billion and the idea that the PFI will be some sort of £1 billion bank, but I can assure him that it will not be a bank or a deposit-taking body and it certainly will not start at the scale of £1 billion. We see it working essentially as a co-venturing institution that will bring better facility to the public sector so that it can engage the deal-making skills that are necessary for getting successful PFI projects up and running. It will offer an opportunity to bundle together smaller schemes, which might not be viable on their own under the PFI because of overheads, to enable them to proceed.
Through the partnerships that Partnerships UK will assist, I believe that we will better harness the skills and resources of the private sector. Partnerships UK will enable the public sector to form partnerships with the private sector on more equal terms. As a public-private partnership—in the private sector, but operating in the interests of the public sector—it will be able to offer a long-term home to the skill base required to support the public sector in the execution of public-private partnership deals.
The business plan for Partnerships UK is under development. We have consulted widely throughout to ensure that Partnerships UK generates the greatest benefit for all the stakeholders in PFI, public and private alike. It is clear already that those with an interest in PFI and PPPs see an enormous benefit in an initiative that will make the Government a better partner.
The Bill modernises the public sector and transforms the way in which we plan and account for public spending.

Mr. Campbell-Savours: Will my right hon. Friend give way?

Mr. Smith: My hon. Friend realises that I am making my peroration. I shall happily give way to him.

Mr. Campbell-Savours: I want to clarify a few matters. The Government have established many limited companies over the years, such as the Student Loan

Company and Remploy. Will the Comptroller and Auditor General have access so as to audit the accounts of such companies, which increasingly carry out the Government's business?

Mr. Smith: As I said, a number of bodies, including those that my hon. Friend mentioned, are covered by provisions on auditing arrangements in the Companies Acts. That has not prevented the National Audit Office and the Public Accounts Committee from investigating them in the past—I believe that there was an inquiry into Remploy. I can but stress that the same powers as are available now will be available to the Comptroller and Auditor General, the National Audit Office and the Public Accounts Committee under the new resource accounting and budgeting arrangements.
I realise that members of the Public Accounts Committee, based I am sure on their experience, will have an appetite for revisiting some of this territory and the rules that are presently in operation. I am prepared to discuss that, but it is not the primary purpose of the Bill. I understand why my hon. Friend raised the issue. I think that I have been as forthcoming and sympathetic as I can be in saying that the Government are open to dialogue on this matter.
The Bill will give Parliament and the public, as well as government, more and better information on how we secure quality public services and value for money for all our people. I commend it to the House.

Mr. Oliver Letwin: I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
this House declines to give a Second Reading to the Government Resources and Accounts Bill because, although great benefit can be derived from the construction of a proper balance sheet for the public sector and from proper rules for clear, simple and rigorously-defined government accounts, the Bill gives unfettered discretion to the Treasury, establishes no clear principles for the accounting of income or expenditure, will permit the Treasury to continue to omit large public assets and liabilities from the national balance sheet, and hence represents a missed opportunity to make much-needed improvements in the compilation and presentation of government accounts.
I declare an interest—which lies in the Register—relating to clauses 15, 16 and 17, which is not connected to the reasoned amendment and about which I shall say precisely nothing.
The Chief Secretary introduced the debate with the utmost reasonableness, for which we are duly grateful, but I fear that, in so doing, he failed to address some of the major issues. Like the poet Ovid, he may later feel that I began better than I ended, because I want to start with some congratulations, proceed to the identification of some shared problems, move on to lament the inadequacy of the solutions in the Bill and end with an indictment.

Mr. David Drew: The hon. Gentleman is a good supporter.

Mr. Letwin: Indeed, a good supporter, as the hon. Gentleman says.
First, the congratulations. The Chief Secretary said that the Bill had a noble lineage, and he was absolutely right. The idea of resource accounting was introduced by my


right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) and my right hon. Friend the Member for North-West Hampshire (Sir G. Young). Its aim is shared on both sides of the House. The Chief Secretary echoed the somewhat overblown statement of the Liberal Democrat spokesman, the hon. Member for Kingston and Surbiton (Mr. Davey), when he said that the Bill had a Gladstonian aspect. It is a splendid aim to give the public sector a proper balance sheet and proper accounts. On that we are at one.
Congratulations are due because people in many Departments have laboured mightily over the past two or three years accumulating a kind of Domesday book of the public sector. That is another fine tradition in the United Kingdom. We must remember that the purpose of the original Domesday book was to maximise the tax take of the then Government. That is something at which the Government have been greatly skilled, so we recognise that they will also have been particularly good at this task. However, in this case the issue is not how much can be taxed, but rather what the taxpayer owns, how it is being used and what is being spent on it. We are agreed that we need better information on that. That need is great: much greater than the Chief Secretary made clear in his remarks.
First, there is the issue of depreciation. There is a massive problem in our public sector: we have never had a proper sense of the resources that we use up, or of the gradual depreciation, or decline, of assets under public sector control. That has obtained on both sides of the House, regardless of which party has been in power. The water industry, under its nationalised aegis, is a classic case. Year after year, Chancellors of the Exchequer in both parties have found it more immediately necessary to spend on social security, or on whatever else has been at the top of the agenda. Consequently, not enough has been spent on investment in the water industry—although billions have now been spent in the private sector—and as a result we have, to this day, an essentially Victorian sewerage system.
There are many other examples. As we all know, much of the public dissatisfaction with our hospitals and schools derives from the fact that for years they, too, were depreciating unnoticed—unnoticed not by their users, of course, but by the Treasury in its discussions with the various Departments. We desperately need a proper set of accounts that properly grasps the depreciation of those public assets. Again, the parties are joined in that desire.
The Chief Secretary said nothing about liability, but I think he will also agree with me—I hope he will—that we are desperately lacking in that regard. We have no proper account of the great and growing liabilities of the public sector in relation to, for example, pensions. I am referring not to the relatively minor, although in itself quite large, problem of the public sector pension schemes which are, to some extent, dealt with in the Bill, but to the public state pension, which represents an enormous and ballooning liability in not just this country but many others. We need clarity in regard to the scope and scale of that liability.
We need to understand far better than we do at present what are the real liabilities that are totted up each time a project is implemented in the private or public-private sector under the private finance initiative, and the public

sector establishes a contract that effectively enforces a series of payments over a long period that currently do not appear in the public accounts.
All that is allied to the enormous need for much greater clarity of presentation. I draw the House's attention to three important statements made in an article. First:
Financial reporting in the public sector is a key element in the accountability of public sector bodies.
I think we would all agree with that. Secondly:
While it is recognized that financial reports should be readable and intelligible, improved reader understanding is sometimes felt by those who compile them to be a disadvantage.
Thirdly:
A number of steps can be taken to help the process. For example, the report should … minimise jargon … Have a logical structure … Not be unduly distorted"—
I draw the House's attention to this—
by public relations considerations".
The importance of those comments lies in the fact that they were made by none other than the current chief adviser to the Chief Secretary on these matters, Professor Likierman—who also said, in a report written with Vass,
Those who wish to find out what is going on are faced with major hurdles".
That is indeed the set of problems that we face in the presentation of public accounts.
I think—I hope; I trust—that, so far, the Chief Secretary and I are on common ground. Members of the Public Accounts Committee who have already spoken have made it clear that they share many of the concerns that I have mentioned, and it appears that the last Government shared them. We have a substantial problem. The next question is, does the Bill address that problem? It is, I am afraid, abundantly clear that the answer is no: it hardly begins to do so.
I shall begin with assets. We are told in paragraph 46 of the helpful notes on clauses prepared by the Chief Secretary's officials—this mirrors the Chief Secretary's own statements:
It is likely that the first accounts will only cover the central government sector … but that these will be expanded to include all public sector bodies".
The Chief Secretary began by lamenting the difficulty of discussing such matters in terms that ordinary people would understand. Let me try to do it for him. He was trying to tell us that the Bill had nothing to say about the accounting of schools, hospitals or roads—the three largest public sector assets.

Mr. Key: Defence.

Mr. Letwin: As my hon. Friend points out from a sedentary position, there are yet other aspects, but I draw attention to three in my modest way. The Bill leaves out the most important.
Hon. Members might think that, as the Chief Secretary had not done particularly well on assets, he would have done something on the liability side. We search in vain in the resource accounting manual and we search even more in vain in the Bill for any reference to the state pension and its liabilities—there is not one. There is not even the suggestion that in due course, or at a later stage, there will


be any proper accounting of the state's massive liabilities—hundreds of billions of pounds worth—for state pensions.
One might have thought that, as there were going to be clauses about the private finance initiative and the public-private partnerships in the Bill, it would contain something about accounting for the liabilities of the PPP or the PFI. That does not seem an unreasonable request of a so-called resource accounting Bill. Sharing, I trust and hope, the view that something was needed, we might have thought that there would be something in the Bill. There is not—not a word about the liabilities for schools, hospitals or roads that are subject to the PFI.
It is possible that the minuscule, by comparison, number of PFI and PPP projects conducted by central Government Departments will be covered. I say it is possible because my right hon. and hon. Friends and I have asked a series of written questions about the matter. We have received some answers. For the House's edification, I shall read the totality of the text of one of those answers. The Chief Secretary said:
Any liabilities incurred as a result of such transactions will be accounted for in line with the requirements of Chapter 9 of the Resource Accounting Manual. This states that for all complex transactions, the overriding principles of Financial Reporting Standards (FRS) 5 'Reporting the Substance of Transactions' should be followed.
In particular, an amendment to the version of the Manual published in August 1999, which has been agreed with the Financial Reporting Advisory Board, will make clear that Private Fiance Initiative (PFI) transactions should be accounted for in accordance with the Treasury Taskforce's Technical Note No. 1 (revised) 'How to account for PFI transactions'.
The Technical Note sets out additional practical guidance on the Accounting Standards Board's Application Note (AN) 'Amendment to FRS"'—[Official Report, 1 November 1999; Vol. 337, c. 49.]
[Interruption.] I am delighted to hear that the House does not want to hear the rest of that fascinating explanation in plain English, which the Chief Secretary recommended to the House, of exactly the answer to the simple question: will PFI contracts for central Government Departments be included or excluded? I do not have the foggiest clue. I doubt that the Minister who signed the answer had the foggiest clue. Certainly, the House will not. It is possible that they are included.
In passing, I should like to mention a noted example of open government. We tried to find out the answer to that question and to others by the simple expedient of trying to talk to the person who actually knows about these things, which, I regret to say, is not ever a Minister in such cases, but his chief adviser. Professor Likierman is one of the world's great experts on public accounting, so one might have thought that one would get an answer from him. I tried to see him. I sent a request and was told that it had been lost. Then I sent a fax request. I was told that it had been received, but that it had to be transported to the Chancellor's private office for reasons that remained obscure. Then I was told that the decision was that I could not see Professor Likierman without a Minister and, unfortunately, no Minister would be available, so I could not see the professor. Therefore, I cannot tell hon. Members whether the answer to the question is yes or no. I am sure that Professor Likierman knows. It would be very nice if, through the Minister at some time, he would tell the House.
I am clear about one thing: when it comes to presentation, there is nothing in the Bill to clarify definitions and to ensure that accounts for the public

sector are presented like all private sector accounts have been since about 1300, so that ordinary people can understand them.
The position is much worse than that.

Dr. Nick Palmer: I am slightly surprised that the hon. Gentleman suggests that private sector accounts have been easily comprehensible for the past 600 years. I do not remember that always being the case, but is he not letting the best be the enemy of the good? He is saying that, because at the moment we do not account for any of those things—capital expenditure, schools, hospitals and roads—no reform of the accounting system should be countenanced; but reform should cover all those things. Does he agree that logically his position would lead to a delay in the revision of the accounting system until such time as all those elements could be introduced? Another year or two might pass before we reach that point.

Mr. Letwin: The hon. Gentleman, who is a friend of mine, asks a typically acute question, which I shall answer as best I can. As I was not able to ask Professor Likierman, I cannot give an exact reason—but I have a speculation. I think I know why it is that schools, hospitals and roads, which are usually the first items that one would start with, have been excepted. It is because "Yes Minister" is often less of a parody than a reality.
I think that what happened, roughly speaking, is that a Minister—probably my right hon. and learned Friend the Member for Rushcliffe—said, "We ought to have some resource accounts". Subsequently, many permanent secretaries went into a huddle and said, "This is a most frightful thing that is hitting us—we shall for the first time have to put everything down. What can we do? We must find the smallest items—those that will cause the most technical difficulty, but reveal the least—and begin with those. Indeed, we must begin with those items that do not guarantee that we will ever have to move beyond them. We must remember to include such words as 'it is likely that', and assure the House that 'in due course', 'perhaps', 'maybe', 'if', 'sometime', 'never' we shall get to it. Meanwhile, we will have the most enormous resource accounting manual. We will also be able to give the Minister a Bill"—which I shall deal with shortly, as it will make the Chief Secretary one of the most powerful people in the whole world—"so that he will be very, very happy with us. We will get our knighthoods early while having succeeded in not writing down anything that matters two hoots."
I grant the hon. Member for Broxtowe (Mr. Palmer) that company accounts are an imperfect mechanism—as those of us who have been dealing with them for many years in the private sector know all too well—but they have the great advantage of regularity—a term to which I shall return momentarily—and the advantage of relative simplicity. The combination of those two advantages means that people who are skilled with such accounts and the notes accompanying them, because they are composed under standards of accounting practice, have at least a chance of doing the detective work to find out what is really happening. I fear that because the Bill contains no such provisions in the public sector, no such ability will pertain to the public sector. That is my biggest complaint.
As some of my hon. Friends have already started to explain, the situation is really very bad in one respect. What does clause 5(2) do? Does it say something about establishing an independent watchdog to ensure that there are proper definitions? No, it says:
Resource accounts shall be prepared in accordance with directions issued by the Treasury.
Clause 5(3) states:
The Treasury shall exercise the power to issue directions under subsection (2) … subject to such adaptations as are necessary in the context of departmental accounts"—
which I think should read "as are judged necessary by the Treasury", and "subject to such adaptations as the Treasury chooses".
In clause 7, we might expect to see mention of an independent body, but not a bit of it. Subsection (1) states:
The Treasury may direct a government department to prepare for each financial year accounts in relation to any specified matter".
Subsection (2) tells us:
Accounts under subsection (1) shall be prepared in accordance with directions issued by"—
you guessed it—
the Treasury.
When we come to the whole of government accounts, in clause 10(2), we are told:
The accounts shall—

(a) contain such information in such form as the Treasury thinks fit, and
(b) be designed to conform to generally accepted accounting practice subject to—

our old friend—
such adaptations as are necessary",
as determined by the Treasury.
I think that we are able to describe the Bill and its provisions on who will define terms and the rules of the game as a Bill that allows the Treasury to do exactly what it chooses. Quite a good first clause in the Bill would be one that said, "Under this Bill, the Treasury may do anything it likes." That is why I said that the Chief Secretary will be a very powerful person.

Mr. Edward Davey: I have much sympathy for the point that the hon. Gentleman is making. However, will he tell us where in the previous Government's White Paper, "Better Accounting for the Taxpayer's Money", they proposed an independent body to determine public sector accounting standards?

Mr. Letwin: I am very grateful to the hon. Gentleman for that question, but am unable to answer it. However, in about two or three minutes, I shall be making an announcement showing that, unlike the current Government—the Liberal Democrats have never had the chance to be in government—some of us learn from our mistakes. Although Liberal Democrat Members never—I have checked the record—mentioned the point at the time, I am grateful for converts at any time. As I shall explain shortly, Conservative Members have been converted on the issue.
The problem is deeper in two senses—only one of which has been dealt with by the hon. Member for Workington (Mr. Campbell-Savours); by my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), the current Chairman of the Public Accounts Committee; and by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the former Committee Chairman.
In clause 11, there is the first glimmer of an independent body. It states:
The Treasury shall send accounts under section 10 to the Comptroller and Auditor General.
Nobody doubts the independence of the Comptroller and Auditor General, nor his competence. The problem is that the clause goes on to say that the Comptroller and Auditor General
shall examine accounts sent to him under this section with a view to satisfying himself that they present a true and fair view.
That language has been constructed precisely to limit the scope of his inquiries—with all the impediments that were described as to how he conducts them—to the question of whether something has been taken, stolen or misappropriated.
We are blessed that British government, under any Administration, is, on the whole, honest. The Comptroller and Auditor General and the Public Accounts Committee do good work but, on the whole, they do not have to work very hard because, on the whole, our Administration is honest. Thank goodness for that. The proposal continues that fine tradition—there is no complaint about that—but also prevents the Comptroller and Auditor General from doing more.
We do not have to look far for the truth of that assertion. In the notes on clauses—which are remarkably open and splendid—we are told:
Due to the nature of the accounts … there is no requirement for the C and AG to provide an audit opinion concerning the regularity of the accounts but simply to determine whether, in his opinion, they are true and fair.
We are dealing here with a clear case. The Bill sets up the Treasury—because the Treasury designed the Bill—as the body which will decide on the definitions, on how accounts are prepared and presented and on whether, in the words of Professor Likierman, they do or do not contain an undue proportion of public relations about them. All these things are to be left to the Treasury. Yes, there is proper regard to whether money has been stolen or misappropriated, but none to having an independent body verify whether the presentation of the accounts is comprehensible, clear or designed to provide a misleading opinion.

Mr. Edward Davey: Is the hon. Gentleman aware that the National Audit Office, the Public Accounts Committee and the Select Committee on the Treasury prefer the Government to go for the true and fair opinion basis, rather than the proprietary and regulatory basis that the Conservative party has proposed?

Mr. Letwin: If the body was independent and was setting up standards of accounting practice, I would entirely accept the proposition that true and fair would be the right measure. Alas, there is no such body and no such set of definitions.
That leads me to the indictment. This Bill—not so surprisingly from the Government—is a triumph of presentation over substance. The Government are saying one thing and doing another. The Bill is an empty box. The most important assets and liabilities are missing; there is total discretion for the Treasury; and there is no independent check on definition or presentation. It is not a resource accounting Bill in anything but name; it is a creative accounting Bill, from a Chancellor who has proved himself to be the most brilliant creative accountant in British political history. [Interruption.] I thought that that was a compliment and I am surprised that the Chief Secretary rejects it. That compliment has been paid to the Chancellor by many external observers, and will continue to be paid as long as he continues on his course.
To be constructive, I shall make a promise. We are binding ourselves once and for all—because we have learned from our mistakes—to a clear, complete and comprehensible set of public accounts. That is democratically proper, and a matter of common sense. We have announced today that we have asked Sir Bryan Carsberg—the chairman of the International Accounting Standards Committee, and one of Britain's most distinguished accountants—to head a new shadow accounts commission. It will remedy the defects in the Bill by setting out standards of national accounting practice, clear definitions and clear systems of presentation which mirror the statements of standard accounting practice in the private sector, so that no future Chancellor—Labour or Conservative—will ever have the opportunity to mispresent the accounts and mislead the public again. I believe that that is one of the great advances in the conceptualisation of fair and accountable government in this country.
I will make an offer, beyond that promise, to the Chief Secretary—come with us. Take our shadow accounts commission with its chairman intact and we can set it up as an independent body with cross-party consensus. Then we can take this lamentable empty box of a Bill and turn it into an Act that we can all be proud of and that gives us genuine resource accounts for the whole Government.

Mr. Robert Sheldon: The hon. Member for West Dorset (Mr. Letwin) drew attention to clause 11(2) on the restrictions on the work of the Comptroller and Auditor General, and I shall deal with that point, but my right hon. Friend the Chief Secretary was right to introduce the Bill because it is an important measure that has been acclaimed by the Public Accounts Committee and various Select Committees.
Much of my time as Chairman of the Liaison Committee has been spent trying to get Select Committees to examine the expenditure for which they have some responsibility. They have not been able to do it because, frankly, the accounts are impenetrable to the ordinary person. My right hon. Friend is to be congratulated on trying to open up this important area.
The Public Accounts Committee is very much in the shadow of Gladstone. For 14 years, I faced the one word over the door of Room 6A, which the right hon. Member for Haltemprice and Howden (Mr. Davis) now has the privilege of using: in lettering that is very difficult to decipher, because it was devised by Pugin, it says "Assiduity". That is the Committee's and Parliament's task in examining the accounts.
For 23 years—14 as Chairman—I have been a member of the Public Accounts Committee, whose origins go back to the Exchequer and Audit Departments Acts of 1866 and 1921. I took some part in the National Audit Act 1983, which arose from Norman St. John-Stevas's Private Member's Bill, predicated on the understanding that he wanted to be able to follow public money wherever it went.
The idea came from John Garrett, the Member for Norwich, South from 1974 to 1983 and from 1987 to 1992. I worked with him closely on the Fulton committee on the civil service; he was a management consultant and I was a member of the committee. Norman St. John-Stevas called him the grandfather of the Bill, which looked back to what Gladstone had in mind and to all that he was able to achieve because of the enormous power and influence that he had.
What was Gladstone's vision? He set up a Public Accounts Committee, chaired by a member of the Opposition, who was to examine the details—not just the broad area—of all Departments' spending. Rarely or never could that power have been given to an Opposition Member under subsequent Administrations. To commit an Opposition Chairman to examining such spending details would have been unthinkable.
Gladstone's intention was followed up by the 1866 Act. The intentions of that Act are very relevant today, because we live in that shadow and we are trying to retain the kind of parliamentary accountability that was devised by Gladstone and led to the very high standards of public service that we have come to regard as normal. That is what happened then and is still happening.
What the 1866 Act achieved was begun by the report of the Select Committee on Public Moneys in 1857. There was a huge step forward with the establishment of the Committee of Public Accounts in 1861 and the passing of the 1866 Act, which established the post of Comptroller and Auditor General.
The key driving principle was the belief that the audit of all the money spent by central Government Departments should be done on behalf of Parliament, and from 1866, that was to be done by the Comptroller and Auditor General. The long title of the 1866 Act noted that its purpose was
to regulate the Receipt, Custody, and Issue of Public Moneys and to provide for the audit thereof".
In 1866, the idea was to bring Government spending—public moneys—under the scrutiny of Parliament, at a time when central government was virtually the only vehicle for public spending. In 1999, when we have a plethora of public service providers, it cannot be argued that public moneys are properly accountable for to Parliament in the way that they were for so long.
It was necessary for the Comptroller and Auditor General to have access to Departments. When the Public Accounts Committee considered the Exchequer and all the Departments back in 1866, the issue of what constituted public moneys was a matter of concern to several members of that Committee, and they were assured that all aspects of revenue and expenditure were covered. That is not the case today. The Select Committee, in the report that led to the changes made in 1866, said:
Your Committee feel assured that whatever new securities may be devised for the faithful appropriation of the public money, they will be incomplete unless they are accompanied by a system of public accounts founded on the principles they have suggested".


That has manifestly not been the case.
Many new securities have been devised for spending public moneys, but those have not been matched by a commensurate extension of the rights of Parliament properly to scrutinise that expenditure. That is the difference that we have seen over the years. Gladstone's achievements have been whittled away, as was exposed by John Garrett in a massive amount of research, for which proper tribute should be paid to him. It provided the background for Norman St. John-Stevas's National Audit Office Act 1983. Because of that research, he was fully aware of what had happened over the years, and he wanted to replace that with the original intention.
I was a member of the Standing Committee that scrutinised the 1983 Act. Leon Brittan was the Chief Secretary to the Treasury and I was the shadow Chief Secretary. In spring 1983, Leon Brittan introduced in Committee several new clauses and deleted others. With a general election imminent, we reluctantly agreed to those amendments. Before the Bill's consideration had been completed, the general election was called. On the last day of that Parliament, when nearly all the outstanding legislation was lost, my role was to go round the Chamber to inform my parliamentary colleagues on the Opposition Benches not to shout, "Object." I told them that the legislation was important, because we must try to regain parliamentary accountability. Even my hon. Friend the Member for Bolsover (Mr. Skinner) kept silent on that occasion.
The National Audit Office Act 1983 did not achieve all that we wanted, and we hoped for subsequent renewal of the original intentions. As so often happens, what was temporary became permanent and stayed in place for 16 years. Meanwhile, I became Chairman of the Public Accounts Committee, which was what I wanted, as I wished to see the new Act implemented and the position of the National Audit Office established.
During my 15 years in that post, I tried to pursue the need for greater powers of investigation for the National Audit Office. One occasion on which I received some encouragement was the meeting in October 1994 with the right hon. and learned Member for Rushcliffe (Mr. Clarke), who was then Chancellor of the Exchequer. With Sir Peter Hordern, the then Member of Parliament for Horsham and Chairman of the Public Accounts Commission, I pointed out that the National Audit Office did not have the same statutory rights of access as did the European Court of Auditors or the Audit Commission. That is unacceptable. I pointed out to the then Chancellor that I understood the Government's reluctance to concede such rights in the 1983 Act, given the extensive new powers being brought in. However, the standing of the National Audit Office, and the way in which it carries out its work, is an important aspect of the case for extending its powers to something like their original scope, before the Treasury whittled them away over 16 years.
The right hon. and learned Member for Rushcliffe on that occasion said that he recognised many of the arguments for increased access. He accepted that the issues needed to be re-examined. The discussion was very useful, and some improvements were made. However, although I wanted all non-departmental public bodies to be audited by the National Audit Office, only half of them are so audited.
In that regard, I must pay tribute to my right hon. Friend the Chief Secretary to the Treasury. This Government have ensured that all 15 of the new non-departmental bodies are audited by the National Audit Office. That does not mean that private sector auditors are not included in the process, as the NAO makes use of them all the time. The private sector is very valuable, and work is given to accountancy firms with the appropriate expertise. That provides a useful exchange of views about how such matter should be audited.

Mr. David Davis: The right hon. Gentleman said that all 15 new non-departmental bodies have been opened up to the National Audit Office. Given that the Legal Services Commission and the body that looks after the royal palaces have also been opened up to the NAO, the Government have a very good record in that respect.

Mr. Sheldon: I pay tribute in turn to the right hon. Gentleman, who is a successor of mine as Chairman of the Public Accounts Committee. I am pleased that he is present today, and I look forward to many more reports from him in the years to come.
Even when accounts are audited by the private sector, responsibility lies with the National Audit Office. Let me refer now to what the Bill contains, and what it omits.
The Bill makes no provision for the Comptroller and Auditor General to be the auditor of all Executive non-departmental public bodies. I pay tribute to my right hon. Friend the Chief Secretary for what the Bill covers, but it does not cover what is now called the register of social landlords. It does not cover either the Housing Corporation, the Environment Agency, student loans, or Remploy.
Although I accept that the NAO can ask for the accounts of those bodies, I had to use a bit of muscle to make sure that it could inspect the accounts of the register of social landlords, as there seemed to be some reluctance about that. Auditors should not have to plead for access. When it comes to the auditing of public money, access ought to be a right.
The Bill does not make provision for the Comptroller and Auditor General to be appointed the auditor of limited companies established by central Government. It makes no provision for the Comptroller and Auditor General to have any access at all to Partnerships UK. I have some nice things to say about Partnerships UK, but I do not like the fact that there is no provision for access to its accounts, even though it will receive public sector funds and will advise on even larger amounts of public expenditure. Clearly, that cannot be right. I hope that that is an oversight that will be corrected in Committee.

Dr. Palmer: Does my right hon. Friend agree that, where a public body such as a local authority is being audited—in that case it would be by the Audit Commission—it would be unreasonably onerous to expect it to be audited twice? If all public bodies of any type were to be brought under the Comptroller and Auditor General, which I understand to be my right hon. Friend's recommendation, would not the legislation governing the audits for all those bodies have to be amended?

Mr. Sheldon: The NAO should have access. It has access in certain circumstances at present, but we want to ensure that it is regularised. The NAO should not have to plead for it, but should be able to gain access as of right.
The Bill makes no provision for the NAO to have access to bodies whose accounts are going to be consolidated into WGA—whole of Government accounts. Instead, it offers the inadequate alternative of access to the auditors of such bodies.
It is important that the National Audit Office should have access to all bodies, but also that it is able to audit them. It is not enough for auditors simply to have access, because they must then have knowledge that something is wrong or have some other reason for inquiry. There should be a basic right of access. All sorts of important matters have emerged only because of audit. For example, in the Metropolitan police, the person responsible for paying money for secret matters was living like a lord in Scotland, having taken £5 million. He used to return from his weekends there because he had the power to authorise expenditure and to sign cheques under a provision of secrecy. That matter would not have come out without audit. Only when audit occurs do we discover what has happened.
The Public Accounts Committee and the Public Accounts Commission strongly and unanimously want the changes that I have outlined. What those who drafted the Bill saw as a mainly technical measure did not allow for the important aspects that I have detailed. We are concerned with the accountability of the Executive to Parliament on the most important matters that concern both. I recall a meeting in the Treasury with Denis Healey during which I had occasion to remind him that I was a Minister second and a Member of Parliament first. That is the proper order of priority.
Let me now refer to the rest of the Bill. The important part relates to work on getting the private finance initiative into better shape, and a new body is being formed. The intention is to make the public sector a more intelligent procurer of PFI projects. Like the taskforce, the new body will advise public sector procurers to help to develop projects to the point at which they can be put to market, and it will help them to choose the best advisers for the project.
I am in favour of the PFI, but we must be rigorous about the conditions. If the private sector is more efficient in certain areas than the public sector is, that is splendid, and we should ask that sector's advice and have the work undertaken by it. The private sector can overcome the cost of capital, and the public service can have capital at a lower level. The private sector must mount a not unreasonable hurdle, but if it can be more efficient, by all means let us allow it to be so.
The private sector must also accept risk. Our main tasks are to ensure that it has the right expertise, and that it accepts risk. I see considerable merit in Partnerships UK. To ensure that all that I have said will happen, the Comptroller and Auditor General must have full access to PUK.
I am delighted about resource accounting in more general terms. It is difficult to understand what the estimates and the appropriation accounts really mean. The headings would put anyone off. As the Chairman of the PAC knows, he must go through the papers and must sign them off, but it is difficult to know exactly where the money is going in the detailed programmes. What he must ensure is regularity. We have long taken regularity for granted, but we must not underestimate it. One of my favourite quotations is that cash is certain while

everything else is guesswork. There is something in that, but certainty is not enough. We must know how procedures operate.
We must not go over to resource accounting while losing the advantage of cash accounting during the changeover period. We could fall between two stools in moving from cash accounting to resource accounting. I want parallel operation. Those who work in the area dislike parallel operation because they believe that the work is done twice. But we have seen the consequences of that idea in computerisation projects when the old system has been destroyed but the new system has not worked. Hundreds of millions of pounds have been lost. I always used to ask people whether they had not thought of parallel operation for a reasonable time. They always said yes, but that they were sure that they had got the new system right. I want to ensure that they get it right in this case too.
The Bill gives us the opportunity to correct what John Garrett described as the hijacking of the Exchequer and audit Departments; it will assert the rights of Parliament that Gladstone intended, which which need to be restored. The full implications of what I have outlined have not been adequately appreciated, and I certainly expect that my right hon. Friend the Chief Secretary, with his concern for the duties of his office and for the rights of Parliament, will accept certain amendments in due course.

Mr. David Davis: I confess to having some sympathy with the Chief Secretary to the Treasury, who took up his job not six weeks ago and received the beautifully wrapped parcel of this Bill, only to hear an ominous ticking from inside it. Let us hope that we can turn it into an alarm clock.
As the Chief Secretary implied, the Bill goes right to the heart of the relationship between Government and Parliament. It is seen by some people as a technical measure, but it is a constitutional measure because it is primarily about that relationship between Parliament and Whitehall and the way in which Parliament allows the Government the money that they need to run the country. It is as simple as that.
Sound and proper finance in the UK is underpinned by the virtuous circle of accountability that has already been referred to by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), my predecessor as Chairman of the Public Accounts Committee, and the Bill affects every aspect of that circle. The virtuous circle, outlined by Gladstone, involved, first, the system of supply by Parliament; secondly, proper accounting by Government; thirdly, audit by the Comptroller and Auditor General; and, finally, scrutiny by the Public Accounts Committee on behalf of the House of Commons—with, of course, some estimates votes along the way.
The Bill affects all stages of that cycle, so it is of fundamental importance to the powers and responsibilities of Parliament in general and of the PAC in particular. Despite the measure's critical importance to our work, the PAC was not properly consulted on the draft Bill; the whole Committee is concerned about the content. We were promised a draft Bill in March, but it never arrived. The National Audit Office was given only three weeks between receipt of the draft Bill and publication. That does not represent proper consultation by any stretch of


the imagination. To give the House some insight into how short that period was, the original memorandum seen by the PAC in March contained no proposals about the CAG's access rights, whereas the Bill repeals section 28 of the Exchequer and Audit Departments Act 1866 and substitutes an inadequate access provision.
The memorandum contained nothing about WGA—the whole of Government accounts. It contained nothing on Partnerships UK. It stated that section 26 of the 1866 Act might need to be amended, whereas the Bill repeals that section without replacing it. That section requires Departments to explain any excess of expenditure beyond the original estimate—a rather important component of the Act. The memorandum specified an intention to retain the statutory appropriation accounts timetable for resource accounts, whereas the Bill allows the Treasury to change the timetable by statutory instrument, subject only to annulment by either House.
Those are serious shortfalls in the consultation process. I happily accept that some were caused by problems with the parliamentary draftsmen—I am sure that the Government have hit the timetable problem that occurs every year. None the less, the procedure was inadequate. My hon. Friend the Member for West Dorset (Mr. Letwin) referred to the comedy programme "Yes, Minister". My hon. Friend might think that the programme is a comedy, but, after three years as Chairman of the PAC, I know that it is a training film.
The Bill meddles with the existing legislation governing financial accountability—a process that dates from the Exchequer and Audit Departments Acts of 1866 and 1921. It may not have been intended that the Bill should meddle in those procedures—in effect, the Chief Secretary said that—but it does. Perhaps the absence of intent explains the inadequacy of the new wording. For example, the Bill does not modernise the audit process to reflect changes in the delivery of public services. That was the thrust of the speech made by the right hon. Member for Ashton-under-Lyne; I shall return to his comments.
The Bill locks into place weaknesses in accountability that have grown up in the past century or so, and it does nothing to put them right. The public sector financial environment has changed almost beyond recognition since the passage of the first Exchequer and Audit Departments Act in 1866, yet legislation providing a foundation for the work of the Comptroller and Auditor General in examining accounts remains—even in this Bill—largely as framed 130 years ago.
As the Chief Secretary to the Treasury said, the Bill provides an historic opportunity to remove obstacles that have hampered the House's ability to scrutinise the work of government. Legislation passed in 1866 appointed a Comptroller and Auditor General to audit all Departments, including automatically any new Departments created. That was clearly intended to cover every piece of Government expenditure. Since then, government has undergone massive reorganisation, putting large amounts of expenditure outside the departmental boundary. It is a dangerous anomaly that those managerial changes should have arbitrarily removed from automatic parliamentary scrutiny a large amount of expenditure. The Bill should correct that.
I hope that the Government and the House will seize the chance, which is unlikely to return for many decades, to provide a legislative environment that will nurture and foster the highest standards of openness and transparency. The Chief Secretary said—I think in all candour and honesty—that he wanted to make the best of the Bill and to take on board as best he could the proposals and wishes of the Public Accounts Committee. When I referred to the original memorandum, I hope that I pointed out how many aspects of the Bill were unexpected or not as the Committee expected them to be. The Chief Secretary has a major task before him, but I will do my best to facilitate it. However, I shall do that with the single intention of enhancing the effectiveness of Parliament so that it returns to Gladstone's intention and does not apply the letter of the 1866 Act as it is today.

Mr. Letwin: As one would expect, my right hon. Friend is making an interesting speech. Does he agree that it is essential not only that the Comptroller and Auditor General should have the audit powers to which he referred, but that either the CAG or an independent body, such as that which is being set up in shadow, should establish clear rules on definition and presentation, so that hon. Members and the public are able to understand the accounts presented to them?

Mr. Davis: My hon. Friend makes an excellent point, although I shall not major on it in my remarks. There is a serious risk that the information that the Government and the House put into the public domain could be undermined if it is not properly treated on an agreed basis. That could be done either by the Comptroller and Auditor General or by an independent person, such as an independent director of national statistics, who would be appointed in the same way as the CAG. One or other approach would benefit the Government as much as anyone else; I do not make a partisan point.
My remarks follow closely those of my predecessor as Chairman of the Public Accounts Committee, the right hon. Member for Ashton-under-Lyne. I make no apology for that, because we are making not party but parliamentary points, which are largely accepted by the Public Accounts Commission and the Public Accounts Committee. The proposal in the Bill to change the basis for supply and the way that Departments are held accountable to Parliament should not be brought into force until it is clear that the new system is better than the one that it is intended to replace. I have already pointed out to the Chief Secretary that the new system is not yet very close to demonstrating that it can do that. Therefore, I seek an undertaking from the Government—I think that I have already got it, but I hope that it will be confirmed when the Economic Secretary winds up—that the relevant clauses will not be implemented until the Public Accounts Committee has signified its satisfaction and that the Government have provided it with assurances that all Departments are fully prepared for the change.
The Bill must preserve in existing statute the protections that allow the Government to spend only what Parliament authorises and that bring to the House's attention any excess or improper expenditure. That is an essential minimum requirement. We want to move forwards, and, in giving discretion in those matters to the Treasury, the Bill seems to move backwards. That is quite improper, because Parliament is the final arbiter in those matters.
The Bill must provide the Comptroller and Auditor General with access arrangements that mirror those of the Government. He should therefore automatically have access to third parties contracting with public bodies and organisations carrying out public functions authorised by the Government or Parliament.

Mr. Campbell-Savours: The right hon. Gentleman is the Chairman of the Public Accounts Committee, which could take evidence on the Bill. He could bring in civil servants, including Treasury officials, and question them on the Bill's implications. Am I correct in recalling that a Treasury official is always in residence in the Committee, representing the seat taken by the Chancellor of the Exchequer and advising the Committee? If the right hon. Gentleman can take evidence, why does he not do so? We could all attend the sittings to hear the interesting explanations that the Treasury would have to give to justify the way in which the Bill has been framed.

Mr. Davis: I am not sure whether the hon. Gentleman is trying to tempt me or intimidate the officials in the box, but that point will be put to my Committee, and if the members so choose, that is what we shall do.
I return to the point about outside bodies doing the Government's bidding. I am not seeking a licence for the Comptroller and Auditor General to go on fishing expeditions; I simply want him to be able to verify proper use of public money and proper delivery of public services. That seems to me to be a straightforward point.
I remind the House that private finance initiative expenditure, for example, is expected to amount to some £70 billion over the next 25 years. We are not talking about small beer. Another example that comes to mind is the computer centres that handle £4 billion a year of civil servants' wages. There are serious potential problems in those areas, and the CAG should therefore have access.
At the moment Departments regularly secure greater access for themselves than they do for the Comptroller and Auditor General, which seems to be completely the wrong way round. That is not acceptable.
The Bill must also ensure that the Comptroller and Auditor General is automatically the auditor of every non-departmental public body. The right hon. Member for Ashton-under-Lyne made that point clearly. He said also, as I think I told him in the first place, that the Government have appointed the Comptroller and Auditor General to audit every one of the 15 executive NDPBs that they have created and placed the Legal Services Commission, which was the Legal Aid Board, under the NAO's purview. The Government have made sensible, worthwhile and laudable decisions, but I am saying—as is everybody who has knowledge of these matters—that the process should be regularised and systematic.
The Bill must also enable the CAG to audit limited companies established by central Government Departments. One of the arguments put to us is that it is difficult to do that under European law because a European directive prevents it. If that is the case, I should be interested to hear the Economic Secretary, when she winds up, explain why Austria, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands and Sweden all have CAGs who can do just that. Presumably, they face the same problems.
Members of the House may be surprised to learn that more than 200 such companies—the Student Loans Company and Remploy have been mentioned—receive

between £2 billion and £3 billion of public funding every year. The Minister pointed out that there had been a study on Remploy, and he is perfectly correct—the NAO did a study on Remploy. [Interruption.] However, as a voice from across the Floor is prompting me to point out, that was a value-for-money study, which does not meet the same requirement and does not enable the NAO to check for regularity and propriety. It does not involve the NAO's intelligence-gathering function, which sees what is happening and can start studies that are to the benefit of Parliament as a whole.
Existing legislation does not permit the CAG to audit companies, which is another dangerous anomaly, but not one for which I will ever again accept the argument about the European directive.
Most worrying is the fact that those drafting failures leave quangos and publicly owned limited companies as voluntary loopholes in the access rights of Parliament, to be exercised at the whim of the spiritual equivalent of Sir Humphrey Appleby in Whitehall. Civil servants will make the decisions—no doubt, Ministers will ratify them—effectively to have auditors appointed by the Minister and reporting to the Minister. That voluntary exemption from parliamentary scrutiny should not be allowed.
If whole of Government accounts are to be introduced, the Bill should provide properly for the Comptroller and Auditor General to have access, similar to that contained in companies legislation, to bodies whose accounts are consolidated into the wider whole of Government accounts. That requirement amounts to a matching of that which happens in the private sector. If an auditor audits a large company and is required to give a view on the accounts of that company, no matter that another auditor may audit a subsidiary, the auditor who audits the total is allowed to go in an check for himself. The hon. Member for Broxtowe (Dr. Palmer) said that we do not want double auditing. Of course we do not, but what I describe is a rare occurrence. The fact that the central auditor has that right acts as a check and a deterrent on the operation of the subsidiary auditor.

Dr. Palmer: To assist the House, will the right hon. Gentleman give a concrete example of the sort of inquiry which he would like the Comptroller and Auditor General to be able to carry out, but which the Comptroller and Auditor General cannot carry out under clause 11(5), under which he can require
such information and explanations as he may reasonably require"?

Mr. Davis: From time to time, the Comptroller and Auditor General should carry out a statistical investigation. The right hon. Member for Ashton-under-Lyne said that sometimes, unless one goes inside a subsidiary body, one cannot know precisely what it is. Much of the value-for-money work carried out by the National Audit Office arises in the first instance from the understanding arrived at by taking a direct look. That understanding cannot be obtained at one remove. It would be difficult for the Comptroller and Auditor General to give an unqualified view of the whole of Government accounts unless he was able to do that. The existence of the deterrent effect would, in any event, give him extra confidence.

Mr. Tyrie: To reinforce my right hon. Friend's point, the subsection to which the hon. Member for Broxtowe


(Dr. Palmer) referred makes it clear that the Comptroller and Auditor General's access is limited to the work of other auditors.

Mr. Davis: I had assumed that everyone knew that, but perhaps not everyone has read the Bill as many times as I have.
The Bill is designed to facilitate public-private partnerships. I approve of that: like the right hon. Member for Ashton-under-Lyne, I think that public-private partnerships offer the Government a good way forward. However, substantial sums will be involved—as I said, £70 billion over 25 years—and it is certain that any body receiving such funds will advise on even larger amounts of expenditure by other public sector bodies. Therefore, it is essential that the Bill gives the Comptroller and Auditor General full access to any body funded with public money to improve the delivery of public-private partnerships.
The Chief Secretary told my hon. Friend the Member for Arundel and South Downs (Mr. Flight) that the partnership is not a bank, but a co-sponsoring arrangement, involving far less than the £1 billion that my hon. Friend suggested. However, the leverage of that money is enormous. The effectiveness of the use of public money is enormously important to the public and to the Government, so the National Audit Office and Comptroller and Auditor General should have access. They have access to the current equivalent, so it would be a backward move if the Bill were passed as drafted.
It is extremely important that the Bill should include provision for the Comptroller and Auditor General to validate the Government's performance measures. The resource accounting reforms are important in terms of reforms to the cost base assessment of the capital base, and all the other measures that the outside world would regard as purely technical. However, the real revolution that they offer—one that will occur in the first part of the next century—lies in the attempt to measure the output of government, as well as its cost. That offers the possibility of massive improvements in public service over time.
My right hon. Friend the Member for Henley (Mr. Heseltine) once commented that he could not believe how little there was in the way of management accounts and management information in government. These reforms are the first base for the management information that will allow Ministers to make better decisions, and they will allow the public to understand those decisions—to understand what they are supposed to be getting and what they are getting. It is vital that that information is completely trustworthy and beyond criticism. The only way in which the information can be seen to conform to a gold standard or, in a phrase the Chancellor might prefer, a golden rule, is by the National Audit Office or some other body being the arbiter of its veracity—being the auditor, or the check of last resort.
In the past few years, under the current Government and previous Governments, we have had arguments about all sorts of policies and measures. I recall employment statistics being the subject of several such arguments. That sort of thing is corrosive of the way in which resource accounting is supposed to work. My view is shared by the Treasury Committee and reflected in the Government's approach to the best value initiative. The Government are

rightly spending millions of pounds on enabling the Audit Commission to verify the performance measures in local government. National Audit Office validation would strongly reinforce both public acceptance and the effectiveness of the performance measures.

Mr. Letwin: My right hon. Friend is making an important point. Is he seconding the Treasury Committee's conclusion that
it will be crucial that the Head of National Statistics or of any statistical commission decides which statistics are included within the scope of National Statistics rather than Ministers"?

Mr. Davis: In the last minute of my speech, my hon. Friend raises a crucial point. To answer him, I am 80 per cent. seconding it, but let me draw the dividing line.
It strikes me as perfectly reasonable for the Government broadly to make a public decision on performance measures. After all, that is what manifestos are about. That is a decision proper to Ministers, not one that can be made by some independent body. However, the Minister having decided the measure, it is vital that those who validate it are entirely independent. The National Audit Office in respect of public service agreements and the director of national statistics, or his equivalent, should be equally independent.
All that would add up to a truly Gladstonian measure. The Chief Secretary said that the Bill was one of the biggest reforms since Gladstone. If the Government want to be remembered in 100 years as having passed a measure of Gladstonian impact, one of the key tests will be whether they had the courage to say, "Certain matters will be decided by someone other than ourselves." That would be a brave, but correct, decision and it would be in the public interest to make it.
I regard mine as non-partisan, parliamentary points. I doubt that any member of the PAC would disagree with a word that I have said—I am sure that they will say so later if that is not the case. I understand that, although not long, the Bill is technically complex and that the Economic Secretary will not be able to give me answers today. However, I want an undertaking that the Government will take these points on board and try to incorporate them in the Bill. In so doing, they would make their own reform—which is perhaps one of the most worthwhile reforms in the Treasury's approach in recent years—more than merely worth while; they would make it historic.

Mr. Alan Williams: I speak as a member of the Public Accounts Committee and also as someone who is on the Public Accounts Commission, but I do not speak because of those facts. I speak because, like my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who is chairman of the commission, I have spent more than 35 years in the House, 22 of them on the Labour Front Bench and too many of them in opposition. I spent nine enjoyable years in government.
It is becoming increasingly clear to me—I say this to my hon. Friend the Member for Broxtowe (Dr. Palmer), who has been intervening with points that have the fascinating ring of Whitehall concerns—that the longer I spend in the House the more convinced I am that the rights and powers of this place must be protected and must remain supreme.
I am sorry, Mr. Deputy Speaker, that twice you have had to endure a hobbyhorse of mine during the past three weeks, but it is a reality that living and working as we do within a representative democracy, we live in a token democracy unless there is continuous parliamentary scrutiny of the Executive. We become so used to working within the machine that we fail to see the entire picture. However, without scrutiny we will have tokenism and Executive government. That is why I am speaking in the debate. I am desperately concerned that we may be enshrining certain losses of powers in legislation, which I know my right hon. Friend the Chief Secretary to the Treasury would not wish to see happen over the years. I also feel that we are missing an opportunity to make two strides forward in our accounting procedure.
Every member of the PAC supports resource accounting in the areas where the Government are trying to advance it in the Bill. However, we are more concerned that we should restore what Gladstone thought he had given to the House in 1866—the power of the House to examine and scrutinise all public money for probity, for waste and for accuracy. We on the PAC can only scratch the surface, examining 50 accounts and issues a year.
The role of the House in scrutinising the Executive is meaningful only while the National Audit Office has the fullest possible access to Government expenditure in all its forms. Back in 1866, it was simple. It was easy to ensure that all cash trails were followed. None of us on the PAC is opposed to structural changes in government. When we talk about such changes we are talking about the effect that they will have on the House, and the need, therefore, to adapt the powers of the House and those of the NAO to match them.
As my right hon. Friend and the right hon. Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee, have intimated, over the years, changes have taken place but the powers of the PAC and the NAO have not altered accordingly. We find that we have eroded the democratic duty of the House to scrutinise the Executive, especially on the financial front. It is not only the growing sums of money that are moving outside the net of NAO scrutiny with the altering of the structure of government, with agencies and so on. It is not only the volume but the percentage. There is a progressive decline in the proportion of scrutiny which remains with the House. I say to my right hon. Friend, as did the right hon. Member for Haltemprice and Howden, that we are delighted that each of the small Executive non-departmental public bodies set up under the Government has been subjected to full NAO scrutiny. Unfortunately, that has not been the case in many other instances.
We find that £3 billion that previously would have been subject to NAO, PAC and, therefore, detailed parliamentary scrutiny is now spent through 80 NDPBs. They are outside the scrutiny of the PAC and the NAO. This trend is increasing, and more so in the second category, although the level of expenditure has not quite been reached. It is about £2 billion. This is happening in the form of the companies which the Government set up or help to set up, such as the Student Loans Company.
My right hon. Friend the Chief Secretary cited Remploy. Yes, the NAO can go in and carry out value-for-money exercises and then report, but it can do so only occasionally because it has limited resources. It is

not the same thing as having permanent as-of-right access to various organisations when it wants it, and that is what we are asking for.

Dr. Palmer: First, I would like to reassure my right hon. Friend that my interventions are not on behalf of anybody in Whitehall but purely on my own behalf. I ask my right hon. Friend the same question that I put to the chair of the PAC. Let us take the example of Remploy. What type of information does he envisage the Comptroller and Auditor General could obtain by direct access that he could not obtain under clause 11(5)? Would he require a massive reinforcement of the staff and resources of the NAO if he were in practice, as opposed to theory, to intervene to the extent that would be needed to detect new information?

Mr. Williams: I tell my hon. Friend what he was told before. Until we have been in there, we do not know what might be there. I am not talking in general terms. Recently, if I remember correctly, we directed our attention to the Halton college of further education, to which the outside auditors had given a clean bill of health. I started with my own further education college in Swansea and then Southampton. I referred them to the NAO because I was concerned about information that I was receiving. Halton came on the scene from another source. In each case the NAO went in and carried out its audits. It found things that were missed completely or ignored by the independent auditors, possibly because they did not understand the requirements of the public sector attitude towards monitoring taxpayers' moneys.
There was one example which was ludicrous, but true. It arose as a result of an NAO auditor observing a display of affection between a chief executive and someone in that executive's outer office. On inquiry it was discovered that the person being so greeted was a close friend of the chief executive and the recipient of contracts in conflict of interest from that executive. That was an accident. Those matters would not have come to light if the NAO auditor had not been present. In the same way, we would not have found out about Halton if the NAO had not been there.
We would not have found out what was happening in the Swansea college and in Southampton if the NAO had not gone in to look. If the NAO had been there as of right all along, those problems might have been discovered earlier, things might not have got out of hand, money might not have been lost and jobs might have been saved. If my right hon. Friend would like us to prepare a reading list for him of PAC reports that demonstrate the point—I am sure that he is in pursuit of genuine education—we will gladly do it for him.

Mr. Campbell-Savours: May I point to another case that is of great interest to the House? I refer to what happened in connection with the MI5 and MI6 buildings—a horrible story. Many hon. Members are asking why it was allowed to happen, why money was spent in that way and why we did not find out sooner. Over the years, the PAC has provided many examples of what my right hon. Friend is describing.

Mr. Williams: My hon. Friend and I have worked together on various investigations of individual cases over the years. I will not bore him with them, but I will gladly tell him in private where he can find the information.
The NAO's powers to follow cash, as has been stated, are peculiarly limited. One can understand, perhaps, and regret that the powers of the NAO to follow cash is not equal to that of the Court of Auditors of the European Union, and we all know how deplorable recent events have been in the EU. One is bound to wonder at the duality of standards reflected in the fact that the Audit Commission, which looks into local government, has powers of investigation and inquiry which the NAO is denied.
I am told that in the erudite discussions in the corridors of the Treasury, the EU eighth directive on company law is quoted as inhibiting the freedom of the Minister to do what he would love to do and I am sure will do in the end, when he has listened to all the arguments. I can reassure him, as the Chairman of the PAC did.
We have a list of nine European countries whose equivalent to the NAO can carry out inquiries in relation to companies, but our NAO is debarred—not by EU law, but by ours. Our company law is drawn up in a particularly restrictive way, which prevents the national Parliament's auditor going in and auditing companies. The law could easily be amended, possibly in the course of the Bill.
We understood that there was to have been a draft Bill. I understand that my right hon. Friend is in an even worse position than we are, because the PAC probably saw the Bill before he did. That is the joy of going to a new Department—if a Minister is lucky, he picks up the plums that someone else has prepared, but there is also the danger of picking up what the Chairman of our Committee described as a ticking package.
Had we had the draft Bill, as we were promised, we could have carried out our own pre-legislative inquiry, as was suggested by one of my hon. Friends in an intervention. We could have gone through it in considerable detail and made our recommendations objectively. If our report was not unanimous—the Committee has never divided politically in its reports; that is a unique record—my right hon. Friend could have chosen to ignore it, but I believe that we would have come to a unanimous conclusion. We still might.
I am sure that the Chairman will give me a dispensation from parliamentary privilege if I say that I have already proposed to the Committee what was suggested in an intervention—that we should consider running, in tandem with the Bill, our own investigation into the Bill, as we would have carried it out, had we had the Bill in advance. I hope that the Committee may feel able to do that.

Mr. David Davis: I did not say that because of concern for the right hon. Gentleman's career prospects.

Mr. Williams: I live in hope—not a great deal. I tell everyone that I do not think my career has peaked yet.
The Chief Secretary said that the Bill reinforces the powers that were given in 1886. That is partially correct. It reinforces those powers in relation to an organisation that exists only in part. In that respect, the powers are the same, with one exception, with which I shall deal in a moment. However, the Bill does not reflect the spirit and the principle of 1866—the principle, as my right hon. Friend

said, that all public money should be subject to detailed scrutiny by Parliament's own audit body and by Parliament itself.
Indeed, the danger of the Bill, and the reason why many of us see it as a mandarin's Bill, is that what is needed could probably have been achieved by a couple of amendments. Other than the changes relating to the PFI, the changes relating to resource accounting did not need an entire Bill. I must be of an unduly suspicious disposition, but I have the feeling that in the Treasury, eyes glistened when they saw the opportunity. Here was the chance to write in tablets of stone the restrictions that have grown by accident of restructuring over the past quarter of a century.
It is important that we do not pass the Bill in its present form. The Minister knows how difficult it is to get parliamentary time for alterations, once legislation is passed.

Mr. Letwin: I am grateful to the right hon. Gentleman, who is making an interesting point. Partly to correct the record, does he agree that there is another motive at work—the Treasury asserting itself against the spending Ministries? The Treasury sees the spending Ministries as dangerous loci of mis-spending and has given itself huge powers in relation to them. Our problem is that it has not given Parliament powers vis-a-vis the Treasury.

Mr. Williams: It is dangerous to follow that track. The hon. Gentleman starts me off again. Way back in history, in 1967, I joined a Department called DEA—the Department of Economic Affairs, which was set up to keep an eye on that lot—the unmentionable, to whom we are not allowed to refer, who sit in a little Box at the end of the Chamber.
The purpose of the DEA was to second-think Treasury. I well remember what went on there. As a mere Parliamentary Secretary, I remember clashes within Government and the attempts of Treasury to get rid of the DEA, which were successful, but that owes more to me, if I may say so, than to anything else. I seem to be a disaster in any Department. I have been in four Departments, and not one has survived my time there.
In the Bill, we lose some power. I know that that was not the Minister's intention, and perhaps he did not realise it. The existing Treasury PFI taskforce is subject to NAO scrutiny, but Partnerships UK will not be, so the powers of access that we still have will cease to exist with the passage of the Bill.
Transparency is a current buzzword, and that is what we are asking for. We get rid of incompetence, inefficiency, fraud and corruption only if we have clear access to the information that enables us to discover its existence. That is why I said on a point of order before our discussion on the measure that the scope of the Bill's long title is wide. It states that the Bill's purpose is:
To make provision about Government resources and accounts; … and for connected purposes.
If that does not cover auditing, what on earth does?
My right hon. Friend the Chief Secretary should take advantage of the inadvertent generosity of those in the Treasury who advised the draftsmen, and double his claim to a role in history by being not only the Minister who introduced resource accounting and transformed the


method of public sector accounting, but the person who restored to Parliament the rights that it had in 1866 but that were subsequently taken away.

Mr. Edward Davey (Kingston and Surbiton): On the last day of our debate on the Loyal Address, I said that I considered the Bill to be one of the most important measures of the Session. That caused comment and amusement on Conservative Benches, but I still believe that I am right. As the right hon. Member for Haltemprice and Howden (Mr. Davis) said, the reform for which the Bill provides is in the tradition of Gladstone. Some senior Members have made important speeches to point out some of the flaws in the Bill, and I hope that the Government are listening closely.
Perhaps Parliament's most important function is to hold the Government to account for the way in which they spend our taxes. If the sovereignty of Parliament means anything in the days of global capital markets, it should mean the power of the House to control Government tax and spend. However, the House has not discharged that duty well, if at all. For decades, it has acted like a eunuch towards taxpayers' cash: it has shrieked a lot—its shrill voice has often been heard—but it has not acted. That appalling legacy of parliamentary failure to examine Government accounts in the past 80 years has left those of us who support more investment in our public services with a difficult task: to persuade hard-pressed taxpayers that we will spend their cash much more wisely in future. We can do that, and the Bill goes a short way towards helping the House to achieve that aim. Therefore, we shall support the Bill in the Lobby tonight: it deserves a Second Reading.
However, Liberal Democrat Members believe that the Bill is timid and that it should constitute simply a first step towards re-empowering the House to do its constitutional job properly. We agree with many of the criticisms of the Bill made by the hon. Member for West Dorset (Mr. Letwin). However, we are more critical, and support greater reform, than the Conservatives. We shall table far-reaching amendments to the Bill in Committee and we expect the Government to take them seriously. We shall demonstrate that those amendments are not only sensible but completely in line with the principles of fiscal prudence and transparency in which the Government claim to believe.
Earlier, I made what some hon. Members may consider to be an extravagant claim. I said that the House had not done its constitutional duty on Government expenditure for more than 80 years. I shall substantiate that claim. The House has not voted down a Government expenditure proposal for 80 years. Parliament last rejected an estimate that the Executive proposed in 1919. At that time, the House reduced the royal palaces Vote and deleted the provision for an additional bathroom for the Lord Chancellor in the Houses of Parliament. That may appear to be a small matter but, given the shrill voices that were raised early in the Parliament against the current Lord Chancellor's expenditure on wallpaper, we would perhaps have expected a repetition of the 1919 vote. That did not happen. We have indeed allowed ourselves to be castrated.
Nowadays, a vote to reduce an estimate is viewed as a vote of no confidence in the Government. The last such vote on an estimate that I could find was in 1992, on a

motion to reduce class XX, vote 1—contributions to the European Community. That was debated as a motion of no confidence. Worse, the House has not even granted itself the procedures that would allow it to scrutinise properly the Government's budget ex ante. As a Member of the Procedure Committee, I was involved in the recent inquiry into the House's financial procedures. I was genuinely shocked to learn the limited nature of the House's procedures to alter Government spending plans. We have allowed the Crown to keep the initiative in all financial matters. I refer hon. Members to Standing Order No. 48, whereby we formally surrender our scrutiny potency to be cut off by the ministerial knife.
I hope that you will not rule me out of order, Mr. Deputy Speaker, if I relate the House's financial impotence to Europe. Many hon. Members, especially on the Conservative Benches, say a lot about the sovereignty of Parliament, especially in the context of the debate on the euro. Most of their comments on that issue are misinformed, and many are simply wrong. Their criticisms would be more powerful if they had allowed the House to exercise its sovereignty properly during their last overlong stay in power. The previous Government did precious little to restore the House to the centre of the debate and decision making about public expenditure. A notable exception was Lord St. John of Fawsley who, as a Member of the House, promoted a private Member's Bill, which led to the National Audit Act 1983.
The Bill has a lot to do with the excellent proposal that was first mooted by the right hon. and learned Member for Rushcliffe (Mr. Clarke) when he was Chancellor. I want to put on record a comment that I made to him privately. History may regard the reforms that he first proposed on resource accounting and budgeting as placing his Chancellorship on a par with that of Gladstone, because he started the modernisation of the country's public finances. However, it was only a start.
That the proposals have taken so long to be introduced and that they remain so far from restoring parliamentary power over the purse show the forces that the House is up against. In assessing the Bill, we must return to first principles. We must reconsider the role that we want Parliament to take in budget setting and in scrutinising taxpayers' money.
We need to consider a simple model of the way in which Parliament can exercise its sovereignty properly and fully. There are three essential requirements for that. First, Parliament needs information about the Government's spending intentions and about the amount that they have spent. It needs a detailed and comprehensible set of spending proposals and a decent set of accounts. The Bill goes some way towards fulfilling the latter requirement.
Secondly, Parliament needs the capacity and skills to analyse the information. We need to be able to understand the proposals and the accounts that are laid before us. Can any hon. Members say, hand on heart, that they understand the appropriation accounts? Will we have the resources and training to understand the resource accounts?
There is a third condition, to which I have already alluded, if the House is to regain some control over the public purse. We need the procedures, practices and power to alter the spending proposals that are put before us and to ensure that heads roll when the reports on the spending proposals—the accounts—show that Parliament's will has not been properly done.
Three missing elements would allow proper parliamentary scrutiny: information, resources and procedure. First, I shall deal with information, the lack of which the Bill starts to rectify. The Bill contains nothing that will radically reform the way in which we vote money. The Government have adopted their predecessors' minimalist plans for involving Parliament ex ante in budget setting. The Bill tries to change the current legislative framework, which dates back to 1866, in the most modest imaginable way. Under the Bill, appropriations will be made much as they were previously.
The Government could have put the existing non-statutory supply process on a statutory footing. The Bill could have set out proposals for the way in which the Government's spending plans should he put before Parliament, for what they should include and what they should tell the House. That has been done elsewhere, when other Governments have opted for resource accounting techniques.
Hon. Members will know that New Zealand has led the way in implementing accruals accounting and its Public Finance Act 1989 included a detailed list of the types of appropriation that a Government would have to set before Parliament every year. The New Zealand Parliament receives information on seven types of appropriation—for example, detail on what the money Parliament votes for is intended to achieve, or the output classes of appropriation, as they are called—and the Government's objective for a given sum of money is made transparent. There are other types of appropriation, including that for borrowing expenses and repayment of debt, but the House has no say on Government borrowings—none at all—and will receive none under the Bill.
Right at the start of the budgeting process, the information given to the House is partial and inadequate for us to see what the Government intend to achieve. The Bill will not change that, and I urge Ministers to consider that seriously. If we want better value for money and if we want to force Whitehall to open its books—not only to Parliament, but to Ministers themselves—why do not the Government force our great Departments of state to set out to Parliament their appropriation requests in far more detail? Resource budgeting means that Ministers and Whitehall will have better information on which to make their decisions. That is fantastic—it is a major benefit of the process—but failure to give Parliament a role at the start of the process will mean that the potential benefits will not be maximised.
To emphasise that point, I refer Ministers back to the lessons that we can learn from that great reforming Chancellor, William Gladstone. He aimed to improve the social condition of the country, but was reluctant for that to be done at the cost of a much-increased tax burden or a big increase in expenditure, so he devised his reforms over the control of public expenditure to try to square that circle. Much of what we have today in respect of overseeing and auditing expenditure—from the Public Accounts Committee to the Comptroller and Auditor General—goes back to Gladstone. Taxation and expenditure were kept under control during his periods of office, but national income increased enormously—by 20 per cent. between 1853 and 1861. If our prudent Chancellor wants radical efficiency gains in respect of the way in which the public sector uses its resources to meet

ambitious social and economic objectives, I recommend that he put his trust in the House to assist that drive by giving Parliament the information on spending plans early on.
The Bill is strong in the provision of more and better information after the event—the financial reporting that will take place as a result of the resource accounting initiative. There will be a quantum leap, and I unreservedly welcome that. In particular, the removal of the bias against capital investment in the public spending process is long overdue, although there are concerns. Members of Parliament and Select Committees will have to get used to a new set of information and learn a new accounting language. We will need much more help than we have had in the past to interpret the extra information that we shall receive. We shall need to check that the extra information that is generated is not simply used for Whitehall's benefit as it goes about its managerial role but helps Parliament in its democratic role as well. The Public Accounts Committee and other Select Committees will have to be extravagant in demanding the information in a format that helps parliamentarians hold the Executive to account. That is the challenge of resource accounting, and we shall have to rise to it.

Mr. Letwin: How does the hon. Gentleman imagine that what he is seeking can conceivably be achieved unless there is clarity of definition? How does he imagine that there can be such clarity of definition without an independent body setting those definitions?

Mr. Davey: I am grateful to the hon. Gentleman for that intervention. I am coming to that point and, as he will remember, I intervened on him to make similar points in that vein.
There are more deep-seated concerns about the accounting information that will be provided and the hon. Gentleman touched on some of them. The first major concern surrounds the fact that accruals accounting is inevitably more subjective than cash accounting. As the private sector continually debates its accounting procedures and has developed generally accepted accounting practice, so, too, have Governments had to tackle difficult issues in respect of valuing assets and liabilities. How does one calculate the asset value of a nuclear missile? How does one decide how to take account of inflation in presenting balance sheets? It is vital for the success of this project that such subjective issues are not used as opportunities for creative accounting. There has to be some way in which the users of the accounts can have faith in the figures as presented.
The hon. Gentleman made heavy weather of that point at times. I agree with many of his criticisms, but he seemed to forget that the previous Conservative Government, because of the approach that they took to the issue, could have been subject to all the accusations that he made against the current Government. They set up the Financial Reporting Advisory Board to provide the Government with advice on those difficult areas, but allowed it only to proffer advice. At no stage did the Conservatives give it any determining role or establish a statutory independent body that would be responsible to Parliament and allow it to consider those issues, a process that should perhaps be called the governance of public sector accounting.
I agree with the hon. Gentleman that, in clause 5(2), the Treasury has given itself unfettered discretion to decide on accounting standards and I hope that, in Committee, we can jointly persuade the Government to reconsider. Liberal Democrats believe that we should develop practices similar to those used in New Zealand, the United States, Australia and Canada. New Zealand has its Accounting Standards Review Board and the United States its General Accounting Office. We wish that this country had had such offices at the start of the process, but I hope that we can now achieve them.

Mr. David Davis: I am listening to the hon. Gentleman with interest and agree with a great deal of what he is saying. I was discussing that matter the other day with Lord Burns, the previous permanent secretary at the Treasury, who offered as a model not the General Accounting Office, but the Congressional Budget Office, which is probably closer to what the hon. Gentleman is trying to achieve than the GAO.

Mr. Davey: I am grateful to the right hon. Gentleman for that intervention, and I shall suggest later that we should have another body that is more like the Congressional Budget Office. I am suggesting here that we need a separate body to focus solely on accounting standards. The CBO does another job and we need a similar body in the House.

Mr. Letwin: The hon. Gentleman has explained the point, and he and I—and, indeed, his party and my party—concur on it. Does he agree that it merely falls to the Economic Secretary to consent to the Government introducing into the Bill a proposal establishing precisely such a statutory body—something that we both seek?

Mr. Davey: Again, I am grateful to the hon. Gentleman for his intervention. I hope that he is right; I fear that he may not be. We await the Economic Secretary's winding-up speech with interest and, if the Government were to give ground on that point, the Bill would make much easier progress through the House.
I am not an accountant. I confess to having not read the resource accounting manual, which is rather large. I do not know whether the many hundreds and thousands of decisions about new accounting practices made under this initiative are fair and reasonable, but I know that, if those decisions were being taken outside Her Majesty's Treasury by a body that, like the Comptroller and Auditor General, was genuinely independent, I would trust that manual far, far more. Ministers must take that point seriously. Will the Economic Secretary consider amending the Bill so that, rather than the Treasury, the FRAB is responsible for directing accounting practices for public sector Departments and bodies? Perhaps there is a job for a different body—the Public Audit Forum, about whose role the House has heard so little. We should be told more.

Mr. Letwin: rose—

Mr. Davey: I may be able to pre-empt the hon. Gentleman's intervention: I suggest that the Chief Secretary is cautious about joining his proposed commission. A shadow accounts commission will not engender much faith outside the House.

Mr. Letwin: I am grateful to the hon. Gentleman for giving way again. Does he agree that, were he to go

through the manual to discover the response of Departments, he would see that, on depreciation, for example, they have come up with absurdly differing schedules? Does he also agree that, if we are to have a proper depreciation account that can be consolidated sensibly, single depreciation methods would have to be applied across the Government?

Mr. Davey: I do not feel qualified to give the hon. Gentleman a full answer. There may be legitimate reasons why there are different types of depreciation for different types of assets. I honestly cannot give the hon. Gentleman a considered reply. I agree with his substantive point that we need an independent body so that we can have faith in whatever accounting standards are applied for depreciation.
We need reassurances from the Government that the new information and accounts will be constructed on an independent basis. If it is too late to affect the construction stage of the new accounts, the Government could ensure that all future revisions and changes are independently determined, not Treasury directed.
Resource accounting and budgeting is not just about accruals accounting, but about new information on outputs and performance. Alongside the new balance sheets and schedules, the Government will publish something called an output and performance analysis. That information is to assist the quest for better value for money, and is welcome. However, the Bill makes no provision for auditing that information. The Comptroller and Auditor General will not be able to certify it. There may be good, practical reasons for not auditing it in the first year or two, but the National Audit Office will not even be able to validate it. That is a real concern, which I know is shared by the right hon. Member for Haltemprice and Howden, the Chairman of the Public Accounts Committee. I hope that we can rectify that during the passage of the Bill.
If Parliament is to take this new information seriously, a third party must examine those statistics to ensure that they give a true and fair account of what has happened. It is not just the information that we will get, which will have to be monitored carefully, but the information that we will not get that is worrying many. Hon. Members have already expressed concerns about issues such as which public sector bodies will be covered by the new resource accounts and which will not be, and whether the National Audit Office will have jurisdiction over those accounts. The right hon. Members for Ashton-under-Lyne (Mr. Sheldon) and for Haltemprice and Howden discussed those points in some detail, and I associate the Liberal Democrats with their remarks on extending the institutional jurisdiction of the National Audit Office.
The Government may say that clauses 10 and 11 on Government accounts will help to bring that about. In the explanatory notes and the code of fiscal stability, the Government say that their intention is to prepare consolidated accounts for all public sector bodies—but when? There is no time scale, and there is certainly no independent body to oversee them: only the Treasury will decide.
The House has no guarantee that all public sector money will eventually be properly accounted for and audited. That is not good enough. The Government may mean well, but the House should remind them that the


Comptroller and Auditor General has independence for good reason. The House of Commons and the public need to know that audits of public money are genuinely independent. We will still need to know about the billions of pounds of taxpayers' money that currently falls outside the ambit of the Comptroller and Auditor General.
Whitehall has been preoccupied trying to prepare resource accounts for central Government. Governments can always use the excuse that a narrow focus is the right way to start but, if Ministers do not set ambitious targets for the public sector, they will never meet them. Frankly, the delays and problems in preparing for resource accounting and budgeting suggest that Ministers need a different approach to obtaining whole of Government accounts. Unless the civil service is required by statute to provide Parliament with this information by a certain date, I doubt whether this exercise will be seen in Whitehall to have the priority that it ought to have.
Before I leave the subject of improving financial information for Parliament, I want to touch on an issue raised by clause 9 on the access rights of the Comptroller and Auditor General to accounting information. Other hon. Members have raised this point, and it goes back to my point about the need to widen the jurisdiction of the CAG. Far too often, the National Audit Office's access rights to information are on the basis of agreement and not on a statutory basis. If the country's top financial watchdog is to have the teeth it needs, it should have the statutory right to examine all papers of any public body. That would surely be the most secure way to ensure that all fraud and malpractice is wiped out. I commend the Government for abolishing the previous Government's practice of allowing civil servants routinely to mark documents "Not for NAO eyes" but, as I have argued, they need to go further.
Earlier in my remarks, I said that, if we are to re-empower the House to do its job of financial scrutiny properly, we need to go back to first principles. We need to consider the information, resources and procedures that Parliament has at its disposal to examine the Budget. I have spent some time on information aspects, because that is the core of the Bill, but I want to say a few words about the House's resources—individual MPs and Select Committees—and its procedures, because they are crucial to our ability to use this new information productively.
The vast bulk of the work of the House in analysing the Government's accounts is done by the PAC with the help of the NAO. They consider what has already happened—ex-post analysis of spending and examination of the accounts. Parliament needs to be involved at the start of the public spending process. That would mark a radical departure, but I believe that the House should play a much more active role in scrutinising budgets ex ante.
I have been very much influenced by the recent inquiry of the Select Committee on Procedure, which led to our sixth report "Procedure for Debate on the Government's Expenditure Plans". Under the able chairmanship of the hon. Member for Macclesfield (Mr. Winterton), the Committee came up with significant proposals in this area. Liberal Democrats would like to go further, but our ideas are very much in the spirit of that report.
If the House is to become involved in analysing spending proposals ex ante in a thorough and meaningful way, we will need more resources. That point was made

time and again to the Procedure Committee by witnesses. I am afraid to say that the Committee did not come up with a firm and single conclusion as to what resources should be available and how they should be organised—whether there should be more resources for the Select Committee on the Treasury or a new free-standing body, which the report calls an "estimates office". Liberal Democrats favour the latter proposal. We believe that the House needs a new and authoritative body to assist in the work of scrutinising spending plans. Such a body should, like the NAO, be independent of Government, but, unlike the NAO—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman well knows that this is a Second Reading debate. He is stretching beyond the scope of the debate.

Mr. Davey: I am grateful for your remarks, Mr. Deputy Speaker. I am about to relate my points to the Bill.

Mr. Deputy Speaker: Order. I was not so much making remarks: it was more of an instruction.

Mr. Davey: I am grateful for that instruction, Mr. Deputy Speaker.
Liberal Democrats believe that such a body would be able to apply the information from resource accounting and budgeting to ensure that the new accounts can be used effectively for the scrutiny of public money. An estimates office could be staffed by experienced accountants and economists, could assist individual MPs and Committees to trawl through the estimates and resource accounts, could model alternative spending proposals, and advise on the practicality of switching expenditures. Such bodies exist in other countries—for example, the Congressional Budget Office in the USA. When the Government get round to replying to the report of the Procedure Committee and to answering questions in the Standing Committee, I hope that they will agree to establishing such a body and ensuring that it is well resourced.
However, resources alone will not be sufficient to enable the House to use the new resource accounts. We will have to encourage Committees to utilise those new resources. Above all, we will need to change the procedures to enable amendments to be tabled to estimates so that debate can be real.
The Procedure Committee rightly proposes that it should be a requirement imposed on all departmental Select Committees to report back to the main House, under a set timetable, on the estimates and accounts submitted by their Department. That report should come to the House before the estimates are voted on and the accounts are signed off. It should be able to contain proposals to change the proposed estimates—for example, to switch resources from one area to another. Such a new freedom would encourage Select Committees to scrutinise spending proposals in much greater detail.
The Procedure Committee made a number of new proposals on how the House could amend or table motions about particular estimates. I should have liked the Committee to go further. It shied away from challenging the principle of the financial initiative of the Crown. It did not seek the right of the House to recommend increases in


the estimates, and it did not consider some aspects of resource accounting. I understood why colleagues balked at that idea, but I think that we should have been braver.
Since our report was published, I have been studying the relatively new procedures for resource accounting adopted in the New Zealand Parliament.
The new procedures give Members an increased role in setting budgets, and provide a control for the Executive when new spending proposals could undermine prudent financial control. As a result of resource accounting, and under new standing orders that have operated since 1996, Members of the New Zealand Parliament can propose not only changes to Votes—including increases—but spending increases in regard to Bills. Individual Members can even propose spending increases by means of an amendment to a Bill, or a motion which, if passed, would become law. That constitutes direct parliamentary involvement, ex ante, in the public-expenditure process.
Financial anarchy, however, is avoided through a new device called the financial veto certificate. If the New Zealand Government believe that a spending proposal would have more than a minor impact on the Crown's finances, they can veto that proposal, and the veto cannot be voted on or overturned.
I think that that procedure strikes the right balance between the legislature and the Executive. If adopted here, it would give Members and departmental Select Committees a real incentive to involve themselves in an ex ante scrutiny of the budget, and would re-establish the House's role in public expenditure for the first time for 80 years, ensuring that we could use resource accounting and budgeting to the full extent.
That major change would then impact on the House's ex-post analysis of the budget when it examined the accounts. I believe that the PAC does a good job at present. I know that its Chairman, the right hon. Member for Haltemprice and Howden, is highly regarded by parties on both sides of the House, and I am delighted that he will be helped in future by my hon. Friend the Member for Newbury (Mr. Rendel), but they have an almost impossible task, and resource accounting will, if anything, set the Committee an even tougher challenge. If more Members became actively involved in analysis of spending plans, and if more resources were generally available to Members through an estimates office, the knock-on effect for the PAC would be significant.
The National Audit Office serves the PAC well, but I hope that future requests for money made by the Public Accounts Commission will be far more ambitious. Given the many new developments in public sector accounting, the NAO needs extra resources to enable it to help the PAC and departmental Select Committees to scrutinise the audit far more effectively.
The Bill has several other aspects on which I would have liked to comment at length—for instance, the clauses relating to the Welsh Assembly and the national health service, and the proposal to establish Partnerships UK. Why, for example, is relatively little still known about the proposal to take on the PFI and public-private partnerships? Is it because, as some commentators have suggested, there is a potential conflict of interests? I hope that the Minister will reassure us that, before the Standing Committee deals with clauses 15 to 17, we shall have a much fuller and more detailed report on a proposal that currently strikes many of us as half-baked.
The Chief Secretary said that the Bill was intended only to transfer current financial and procedural arrangements to a resource accounting framework. He said that it was not intended to reform other aspects of the House's financial procedures, or to reform the auditing process, including the powers and jurisdiction of the NAO. That may be true, but I believe that it is the will of the House and its most senior Committees to use the Bill to tackle just those issues. I urge the right hon. Gentleman, between Second Reading and the Committee stage, to consider all the points that have been raised, and to consider how the Bill's ambitions can be raised to a much higher plain.

Mr. Dale Campbell-Savours: I shall speak briefly, because many of my points have already been made. I shall concentrate on a fairly narrow area. If I make the odd error, it is because many years have passed since I was a member of the Public Accounts Committee—I think that I left in 1991—and much of what I shall say will be based on my experience during 11 interesting years.
After leaving the PAC, I reached the view that anyone who wished to become a Minister should serve an apprenticeship on that Committee. In my opinion, no parliamentary process is more enriching in providing those who want to be Ministers with the information that they need, not only on public accounting, but on how to deal with civil servants—and, indeed, how to understand the way in which civil servants are motivated.
I may be speaking out of turn, but I asked the National Audit Office for a brief, because I felt that the issue was important. I apologise to the NAO if I am not supposed to quote from the brief directly, but I shall do so because some aspects have caused me concern. Paragraph 17 states:
The Government Resources and Accounts Bill as currently drafted threatens to weaken the independence of the Comptroller and Auditor General and his relationship to Parliament.
That stark statement represents a lost opportunity to bring the powers of the Comptroller and Auditor General up to date, and to ensure that he can continue to provide Parliament with effective scrutiny of public expenditure under modern government.
All this is, of course, in the name of an Officer of Parliament. It is like the Parliamentary Commissioner for Standards, through her little department, writing a report for Parliament attacking a Government recommendation: in my view, it has the same status. We all forget that the Comptroller and Auditor General is an Officer of Parliament, which is why what is said in the briefing is so important.
I was somewhat reassured, however, by my right hon. Friend's responses from the Dispatch Box. I hope that the NAO will pore over them. Its representatives, who are present, ought to speak to my right hon. Friend the Member for Swansea, West (Mr. Williams) about the responses that we have received from a Treasury Minister. We discussed the extent to which those responses met the concerns expressed in the NAO brief. I was satisfied by the Minister's statement that he was prepared to discuss these matters with the Committee. He also said that there would be no change in the nature of access under the new arrangement, in relation to the present position. Although he did not respond on the issue of evidence being taken by the PAC on the new arrangements, I thought I saw him


nod for a moment. I hope that that is an indication to the Treasury that he, too, would like Treasury officials to give evidence to the PAC on the arrangements that are being made.
I want to refer specifically to the NAO's power to go in and look for the truth. On a number of occasions when I was a member of the PAC—and, indeed, after I left—I asked the NAO to carry out an investigation. It involved a training company. It went in and did what I can describe only as a bloomin' good job. In many ways, it was acting very much in the public interest. The investigation led, in all cases, to a good deal of publicity—not about me as a Member of Parliament, but about the NAO and the work that it had been doing to establish the truth.
I go pretty well all over the world nowadays to lecture on constitutional matters—not only matters involving the British constitution—and I always include a section on financial accountability and public accounting. I believe that the NAO's work is critical to the democratic arrangement that exists in the United Kingdom. Paragraph 15 of the NAO briefing states:
The Bill to be presented to the House has … no provision for the Comptroller and Auditor General to have the necessary statutory access to examine the large amounts of public money spent by new forms of service provider including private contractors and voluntary bodies (such as private contractors handling £4 billion of central government pay".
I find it unimaginable that, although those contractors may well be private limited companies, we do not have the statutory right—given that they are handling Government money—to check their operations to ensure that they are handling that money in the way in which it should be handled.
The briefing also states that private contractors manage six prisons, including Doncaster and the Wolds. Why should we not have statutory access? Taxpayers' money is being used. In every case, we should have access. The briefing says that those contractors spend
£5.2 billion of public money"—
taxpayers' money—
providing New Deal training opportunities".
How interesting. The Chief Secretary was the Minister responsible for setting up the new deal, which has been very successful. I would have thought that he would be the first to secure access not by way of a nod and a wink—but a statutory right of access to pursue the last penny, wherever it is used in delivering the new deal arrangement, whether it be a private company offering training facilities in Workington, or whatever. The NAO should have a statutory right to go in at every level to check how that resource is used.
The briefing says that voluntary sector registered social landlords receive
about £1 billion annually to provide services locally on behalf of central government".
Again, I cannot see why a statutory right of access should not be enshrined in legislation. The anger almost in the NAO briefing is over the fact that the Bill does not provide for such access.
The briefing states that the Bill has
no provision for the Comptroller and Auditor General to be the auditor of all executive non-departmental public bodies (so that he is not the auditor of about eighty such bodies receiving over

£3 billion annually from Parliamentary grant—these include the Housing Corporation which spends almost a billion and the Environment Agency which spends £150 million)".
I know that we have a level of access. I know that there is access through VFM—value for money—but I am talking about a statutory right of access with no resistance, no questions. My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) had to plead for access to the Housing Corporation. He had to plead for access to a number of organisations. There should be no question of pleading; it should be a statutory right.
The briefing states that the Bill contains
no provision for the Comptroller and Auditor General to be appointed the auditor of limited companies established by central government bodies (there are over 200 of these such as the Student Loans Company and Remploy, spending nearly £3 billion each year from public funds)".
That is only the beginning. We all know that, increasingly, public administration is being turned over to such private companies. Early on, some of us resisted that move, but benefits have arisen from the shift. If that is the way that public administration is going, with private companies increasingly having a role, surely we must have the right to follow the last copper into the coffers of those companies to ensure that money is spent properly.
My hon. Friend the Member for Broxtowe (Dr. Palmer) intervened to ask the Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), to give examples of what was meant by
following public money in all circumstances",
particularly where the body that was the subject of NAO scrutiny was subcontracting work and where possibly that money was not fully accounted for. I jotted down a few examples.
I am sure that every hon. Member here would agree that, if the Department for Education and Employment gives money to the Further Education Funding Council, that should be subject to NAO access—a statutory right of access. If the council gives it to a college in my constituency, the NAO should have a statutory right of access to that college as well. I go even further. If the college then hires a catering company to do work within the college in my constituency of Workington, in theory, if it is taxpayers' money, even the catering company potentially should be subject to the NAO's statutory right of access, if such scrutiny were necessary. I am advocating not that the NAO should necessarily exercise that statutory right of access, but that it should have that right to pursue public money wherever it wants.
I have referred to the new deal. I remember a particularly famous case where I called for a series of inquiries into training companies.

Mr. Philip Hammond: Will the hon. Gentleman clarify the matter? Is he saying that the NAO should have a statutory right of access to the books of any supplier to the public sector?

Mr. Campbell-Savours: Not necessarily to any supplier; it depends on the nature of the supplier. If a bread manufacturer supplies bread to a Government Department, I do not think that the NAO would necessarily want to study that manufacturer's accounts—the contract between the manufacturer and the Department


will be an open-market contract—but, if the Department had to employ the bread contractor to carry out some catering internally within its own organisation and it had to employ people, there may have to be a statutory right of access. If someone is using public money—taxpayers' money—the taxpayer should have a right of access to ensure that the money is spent properly.
I take the question of the new Learning and Skills Council. Money will be allocated nationally by the Department for Education and Employment to the national council. On the basis of the White Paper "Learning to Succeed", which was published earlier this year, I presume that the council will then allocate money to regional skills and training councils. Those will allocate money to training providers. I understand that money will also be allocated to lifelong learning partnerships. Wherever public money goes, the taxpayer has a right to follow it, through a statutory right of access, to the organisation that is given that money.
I was talking to my hon. Friend the Member for Carlisle (Mr. Martlew) about the arrangements for Railtrack. I do not know whether the PAC has found some remit—he might be able to tell me—under which it could look at the way in which Railtrack uses money, some of which starts with the taxpayer and passes through train operating companies. I do not know what the arrangements are, but I presume—indeed, I hope—that, under the arrangement, any public subsidy to manage Britain's railway system—any public money—should be traceable. An audit should lead to the area where it is ultimately spent.
I argue a simple principle, in which I have always believed—if public money is to be spent, the taxpayer should have a right of access to ensure that that money is properly spent.

Mr. Nicholas Winterton: It is an interesting debate. I hope that the Economic Secretary to the Treasury is noting, as no doubt the Chief Secretary did, that there is a certain amount of concern about the Bill and criticism of it from hon. Members on both sides and from all political parties in the House.
I was particularly interested in the remarks of the right hon. Member for Swansea, West (Mr. Williams). He said that, after 35 years in this place, his career had not yet peaked. It gave me great encouragement. I hope that, after 28 years in this place, my career has not peaked either, although—he is well aware of it—it has not even yet taken off, unlike his. He has held important offices in past Labour Governments.
The leadership of the Liaison Committee by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) is much appreciated. As he will know, the Liaison Committee is currently conducting an inquiry into the relationship between Select Committees and the Executive—the Government. Many of the remarks made today by him, by my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis)—who is Chairman of the Public Accounts Committee—and by the hon. Member for Kingston and Surbiton (Mr. Davey) have served to make the point that Select Committees are able to play a very valuable role in monitoring the Government.
How right the hon. Member for Kingston and Surbiton was that Select Committees should be able to amend the estimates, to allow for virement within total expenditure

of a particular Department, to highlight the Committee's interests and priorities. I think that, if that became the House's order of procedure, the role of Select Committees—which are vital—would carry much more weight, many more hon. Members would want to serve on Select Committees, and Select Committee reports would be much more meaningful. I hope that not only will my Committee continue to make recommendations in that sphere, but that the right hon. Member for Ashton-under-Lyne and my right hon. Friend the Member for Haltemprice and Howden will ensure that the need for such change is taken on board by the Government.
I should like today to make only a short speech, in my capacity as Chairman of the Procedure Committee. I do not intend to examine in detail the Bill's provisions, as that is a matter for those who know far more about the subject than I do, and is also the responsibility of the Standing Committee. However, I should like to put down two markers arising out of the Procedure Committee's recent work—one is an expression of dissatisfaction with the way in which the Government have handled the Bill's introduction, and the other is an aspiration of how the Government should proceed in future.
As the House will know, the Procedure Committee has taken a very close interest in proposals to introduce resource accounting and budgeting into the public service. On that, we have worked in close liaison with the Treasury Committee and with the Public Accounts Committee.
We have also produced two reports of relevance to the Bill. In March 1998, the Committee's report entitled, "Resource Accounting and Budgeting" appeared and, in July 1999, we published a connected report, "Procedure for Debate on the Government's Expenditure Plans". We have received a Government reply to the first of the two reports, but not, as yet, to the second.
I am happy to say that, broadly speaking, the Committee has welcomed the proposed shift from cash-based to accruals-based accounting within government. In March 1998, the Committee commented that
resource accounting and budgeting should not be oversold as a miracle cure but can be viewed as a useful contribution both in terms of improving value for money from public expenditure and of enhancing accountability to Parliament".
The report "Resource Accounting and Budgeting" contained a recommendation to which the Committee attached very great importance. It was that
the most extensive version of the amendments which might be made to the Exchequer and Audit Acts should be published in draft as soon as possible".
I direct that quote to the Economic Secretary to the Treasury.
The Government reply to that report, published in June 1998, was quite unequivocal on that point, stating:
The Government accepts the Committee's recommendation. The Government agrees that there are advantages in publishing the suggested amendments to the Exchequer and Audit Departments Acts in draft to enable Parliament to give the proposed legislation thorough consideration, and will publish its proposals as soon as possible".
In March 1999—nine months later—we received a short memorandum from the Treasury, setting out
the Government's policy proposals for the legislative changes needed to implement Resource Accounting and Budgeting".
Although useful in itself, that very modest paper was only six pages long.
The paper certainly did not amount to the "most extensive version" of the draft legislation which the Procedure Committee had asked for and the Government had undertaken to provide. Indeed, the Treasury itself described its paper as
an initial basis for considering the legislative proposals for RAB in advance of publication of"—
and I emphasis this—
the draft Bill".
It is therefore clear that, in March 1999, the Government still intended to introduce the Bill in Parliament in draft form. That commitment was repeated as recently as July 1999, in a report by the Treasury to the Procedure, Treasury and Public Accounts Committees, which stated:
a draft Bill will be published later in the current session".
After that date, however, we heard nothing until two weeks ago, when the Clerks of the three Committees that I mentioned received a letter from Mr. John Breckenridge, of the Treasury's RAB legislation team, stating:
I am afraid that it took much longer than expected to draft the Bill and a complete version only became available shortly before introduction. I apologise for not having been able to send the Committees a draft of the Bill when we had undertaken to do so.
I wish to put on record my strong disappointment that the Government have not been able to honour their clear undertaking to the Procedure Committee—which is not only a Committee of the House, but an important Committee of the House—that the Bill would be published in draft form.
The Government have been a strong supporter of the principle of pre-legislative scrutiny. In evidence to the Modernisation Committee, the previous Leader of the House, the right hon. Member for Dewsbury (Mrs. Taylor) wrote:
the Government firmly believes that the quality of legislation can often be improved by consultation with informed opinion on both the substance and the drafting of legislative proposals, before the introduction of a bill into Parliament or at a stage in its passage through Parliament".
In the present case, with a Bill that is both important and highly technical, surely the most appropriate form of scrutiny would have been at the pre-legislative stage. The accumulated expertise of three Select Committees could then have been brought to bear. Instead, it seems that the interests of Whitehall have prevailed over those of Parliament, and Committees of the House are effectively being sidelined in consideration of the Bill's contents.
How right the right hon. Member for Swansea, West was when he said that, when he was a Minister, his priority was still to act as a Member of Parliament. He also talked about the primacy of the House of Commons and the important role that we play in holding to account the Government of the day. How better could the House do that than through control of the vote of Supply? That is the way that it should be done. I hope that, in reply to the debate, the Economic Secretary will be able to give the House a fuller explanation than that in Mr. Breckenridge's letter of why the Government have failed to honour their clear undertaking.
Given that the Government have failed to allow Parliament—in the words of the former Leader of the House—to "consult with informed opinion" at the

pre-legislative stage, is there not a strong case for such an opportunity to be given during the Bill's passage? As Chairman of the Procedure Committee, I propose to the Government that the Bill should be referred to a Special Standing Committee, as that would enable the Committee to hold Select Committee-style evidence sittings before considering the Bill clause by clause. It would be up to the Committee to decide which witnesses to invite, but I should have thought that evidence from Treasury civil servants—who have come in for some remarks and even criticism in this debate—from the Comptroller and Auditor General and from appropriate outside experts on financial procedure would help to inform the Committee's deliberation.
Those three evidence sessions would not add hugely to the timetable for enacting the Bill. Under Standing Orders, the Select Committee stage must be completed within
a period not exceeding 28 days".
The Bill has been introduced at an early stage in this Session, so it certainly cannot be argued that there is not enough parliamentary time for the procedure to be activated.
I draw the Economic Secretary's attention to the fact that a motion to commit a Bill to a Special Standing Committee can be moved without notice, immediately after Second Reading. I very much hope that she, or the Chief Secretary, will move such a motion. That would be appropriate for a Bill which is technical and important, and about which it ought in principle to be possible to achieve cross-party consensus.

Mr. Letwin: When I saw my hon. Friend's name on the Annunciator, I swallowed my meal with great haste and came into the Chamber. I am glad that I did so. Is not what he is saying an assertion of parliamentary sovereignty that would have far wider implications than this Bill, and would be welcome on both fronts?

Mr. Winterton: I hope that it would, and I believe that I am making this request of the Government with a great deal of cross-party support. The Government have stated time and again that they are in favour of pre-legislative scrutiny. Here is an opportunity for them to show whether they mean it.

Mr. Campbell-Savours: If the Opposition had not sought to divide the House this evening, we may have been nearer to securing that objective. If I remember rightly, when the National Audit Act went through the House in 1983, we did not have any Divisions because the House saw it as a House issue. I cannot understand why the Opposition have decided to turn this issue into a political football. I am not making a political point—I am being serious. Why have they done it? It is quite unnecessary. If they had not done so, they might have secured a more sympathetic hearing from Ministers.

Mr. Winterton: I am speaking as the Chairman of the Procedure Committee, and I am not seeking to be party political in any way. I am seeking to represent the interests of this House. That is why I have made this request, although I have done so at 7.22 pm, when there is a vote at 10 pm. Despite that, I hope that the Government will give serious consideration to it.

Mr. Key: I think that I am right in saying that I am the only Member tonight, on either side of the House, who


has served on such a Committee—on the quinquennial Armed Forces Bill. I can vouch for the value of that procedure, which is a huge improvement on most of the legislative steps we take in this House. I hope that the Government will take up my hon. Friend's suggestion.

Mr. Winterton: I am grateful for my hon. Friend's support for my proposal.
Above all, reference to a Special Standing Committee would do something to make amends for the Government's failure to consult at the drafting stage. I give full credit to them—they have apologised for that. It would enable the Committee to give balanced consideration to some of the major issues that the Bill raises.
One of those issues is whether the Bill, as drafted, gives too much unfettered discretion to the Treasury to regulate the operation of resource accounting. This was referred to by the right hon. Member for Ashton-under-Lyne, a past Chairman of the Public Accounts Committee; my right hon. Friend the Member for Haltemprice and Howden, the current Chairman of the PAC; the right hon. Member for Swansea, West; and the hon. Member for Kingston and Surbiton. Clearly, it does raise some concerns.

Mr. Alan Williams: I see that the shadow deputy Leader of the House, the hon. Member for South Staffordshire (Sir P. Cormack), is in his place. This has been virtually a unanimous debate so far, and has been listened to seriously by Ministers because, clearly, it is a House of Commons debate, as my hon. Friend the Member for Workington (Mr. Campbell-Savours) said. Can I appeal to the hon. Member for South Staffordshire? I know that there is limited time, so perhaps the hon. Member for Macclesfield (Mr. Winterton) will endorse this suggestion. Between now and 10 o'clock, would the hon. Member for South Staffordshire take party politics out of this matter, in the hope that we can get a meaningful and positive reply from the Government?

Mr. Winterton: I am grateful to the right hon. Gentleman for that constructive and rational proposal, which I hope was heard by my hon. Friends.

Mr. David Davis: Hear, hear.

Mr. Winterton: My right hon. Friend agrees. Clearly, there is a great deal of common ground across the House.
The creation of the financial reporting advisory body is a welcome development, but there is a strong argument for augmenting the board's independence from the Treasury by putting it on a statutory basis and giving it its own independent secretariat. That would increase the public credibility of the RAB process.
I hope that the Minister can enlighten us on the trigger points outlined in the Treasury's 1998 memorandum. The Treasury stated that these were intended
to provide Parliament with reassurance during the transitional period leading to full implementation of RAB that satisfactory progress is being made.

This matter has been raised during the debate. Trigger point 3 was the audit by the NAO of Departments' dry-run 1998–99 resource accounts. That was due to be completed during the autumn of this year. The Treasury has described trigger point 3 as
the final, and most important phase of the process of implementing resource accounting, since it will determine whether all departments are on track to implement RAB successfully".
It would be helpful if the Economic Secretary could report to the House this evening on the progress on this trigger point. Have all Departments submitted their dry-run resource accounts to the NAO? If not, which Departments have failed to do so? Has the Government had any preliminary feedback from the NAO on the quality of the dry-run accounts?
I wish to refer to the Procedure Committee's report on parliamentary scrutiny of the Government's expenditure plans. In the Committee's view, there is a clear link between the proposed introduction of resource accounting and the need to reform the current arrangements for such scrutiny. The report stated that
resource accounting and budgeting should result in more, and better, information being presented in Estimates and annual reports".
The Leader of the House has said that all will be much more transparent to Members of Parliament in assessing the decisions which the Government are making, and that can only be a good thing. We concluded that our proposals for reform of expenditure scrutiny
are a logical extension of the Government's policies
on resource accounting. There are no party politics here. We are seeking to improve the information coming to this House to enable it to debate and consider these matters more sensibly.

Mr. Drew: I apologise to the hon. Member for Macclesfield (Mr. Winterton) for missing the start of his speech, but I am glad that he made that point. Does he agree that the key to parliamentary scrutiny is how we encourage Select Committees to take up the proper examination through the new methodology?

Mr. Winterton: The hon. Gentleman is right, and he has picked up a matter that was raised with great emphasis by the right hon. Member for Ashton-under-Lyne. Clearly, it is important that Select Committees should find time to look at the estimates, and I have indicated that they should be able to amend the estimates. That would give them a real job to do in dealing with a particular Department, and would make the reports more meaningful. I hope that, with the advent of sittings in Westminster Hall, there will be greater opportunity for debating Select Committee reports.
This is not the time to set out the Procedure Committee's proposals in detail—you would rightly rule me out of order, Mr. Deputy Speaker—but hon. Members can read and assess them in our report, which is available in the Vote Office. I simply urge the Government to give us a speedy and sympathetic response to those proposals and to bear in mind that we regard them as the integral link between the changes set out in the Bill and the opportunity to reform and improve the capacity of the House to scrutinise Government legislation. This is clearly a matter to which the Procedure Committee will return.

Mr. Bill Rammell: My right hon. Friend the Chief Secretary said that the Bill is the biggest reform since the era of Gladstone. The need for reform is underlined by the fact that the legislation with which we are dealing dates back to 1866 and 1921. When we consider how the world, and especially Government expenditure and programmes, have changed since then, it is clear that the accounting rules by which we operate need to change too.
There is cross-party consensus on the issue. The right hon. and learned Member for Rushcliffe (Mr. Clarke), introducing his 1993 Budget, said that Government accounting for public spending had become archaic, and that the time had come to move to a system of accounting that identified more clearly the costs of resources. The Government are implementing that. I hazard a guess that, had the Conservative party won the 1997 general election, a broadly similar Bill would eventually have been introduced.
The case for change is very strong. The changes to resource accounting will mean that Departments produce accounts in a form broadly consistent with United Kingdom commercial practice. That has not been emphasised so far, but it is welcome. There is a consensus that the private sector should be involved in developing public services, so it does not make sense to have a different set of accounting procedures across the sectors, especially if we want to transfer staffing and experience between them. We do not want to encourage people with financial or strategic experience to spend their whole working lives in only one sector.
I have never understood the treatment of capital expenditure in Government accounts. When one spends money on a capital asset, the benefit that accrues from that asset clearly lasts for a significant period, and certainly longer than one year, so it is entirely right for capital expenditure to be spread over the depreciation period. As long as an eye is kept on the balance sheet and the cash flow to ensure that the overall level of activity is financeable, that proposition in the Bill makes sense.
I was attracted by what the hon. Member for West Dorset (Mr. Letwin) said about the change making clear to the Treasury the degree to which public assets are depreciating. Under the current system, that is not always the case. The change should also lead to more informed decision making on capital expenditure. The hon. Member for Kingston and Surbiton (Mr. Davey) highlighted the fact that there is a significant bias against capital spending in the current rules, with all the costs hitting the income and expenditure account in full in the first year of acquisition.
Hon. Members might respond to that by asking whether it makes a difference. I have been struck over the years by the fact that the public sector in its spending decisions does not appear to have as much understanding as the private sector of the need for capital investment. It cannot be denied that the current construction of the rules has an influence on that.
The changes will have a positive impact on the output side, with resource accounting for the first time requiring Departments to report systematically on how their resources are allocated in accordance with their aims and objectives and on what is achieved as a result. That is entirely right and proper.
We have tended over the years to have a fairly polarised debate between those who say that the solution to everything is more money and those who say that it is a question not of the amount but of the way in which the money is used. I believe that in order to improve our public services we need to spend more, but it should certainly be an imperative to analyse critically how we can get the best results with the amount that we put in. We should welcome the requirement in the Bill that the resources allocated should be in accordance with the aims and objectives.

Mr. Letwin: I hope that the hon. Gentleman will forgive the fact that this intervention has relatively little to do with his speech. The House may want to know that the Opposition will be more than happy not to divide the House if the Economic Secretary promises to follow the suggestion of my hon. Friend the Member for Macclesfield (Mr. Winterton) and refer the Bill to a Special Standing Committee.

Mr. Rammell: I am not sure whether I should give a response to that. It is a welcome suggestion. The criticism that has been made time and again of the Bill concerns the extent of the NAO's scrutiny powers, but that is not addressed in the reasoned amendment, so the Opposition's offer is a welcome, non-partisan move.
The changes will improve transparency and make it clearer what benefit the public are getting for the money raised through taxation. I hope and believe that that will inform future spending decisions and allocations.
The Public Accounts Committee has picked up the point that, once the changes are made, it is crucial that significant training and development are provided for both civil servants and Members of Parliament on the way in which the new rules operate. If we want everyone to understand the overall objectives, and to have an informed debate, it is crucial to ensure that everyone is up to speed.
I was particularly struck by the comments of my hon. Friend the Member for Workington (Mr. Campbell-Savours), who expressed concern that the Bill as drafted would weaken the role of the Comptroller and Auditor General and the National Audit Office. Given my hon. Friend's experience and expertise, we should all take that criticism seriously, but my right hon. Friend the Chief Secretary said that there is no change in the Bill to the role, power and responsibilities of the Comptroller and Auditor General. That gives some reassurance. The matter will certainly be taken up in Committee.
Concern has been expressed that the role of the National Audit Office and the Comptroller and Auditor General does not go far enough, in that there is no power to examine organisations that involve substantial sums of public money, such as the Student Loans Company and Remploy. I have much sympathy with that view, but that is the situation that obtains now. Nothing in the Bill would make that situation worse. A powerful case can be made for changing the auditing procedures, but that is not what the Bill is about. It is about the change to resource accounting, and that is one of the issues that should be picked up in Committee.
Another criticism was put forward by the hon. Member for Buckingham (Mr. Bercow), who is no longer in his place, about the working families tax credit and the overall argument that the Government can designate


particular items as taxation or public spending, according to their will—that the WFTC, by being designated as a tax cut as opposed to Government spending, artificially reduces taxation as a proportion of national income. The degree of concern expressed by the hon. Gentleman and other Opposition Members is undermined by the fact that for two thirds of the time in office of the previous Government mortgage tax relief was categorised in the same way, as were private medical insurance relief and life assurance premium relief. I hope that we can now put that issue to bed.
The hon. Member for West Dorset called for an independent accounts commission to bring clarity to the issue, reach agreed accounting standards and provide a firm statistical base on which to measure any changes the Government wish to make. That is an important issue, when one recalls how often the calculation of the unemployment figures was changed by the previous Government. However, I wonder whether the hon. Gentleman is committing his party to accepting in full the recommendations of such an independent commission. If not, I suggest that the novelty of his request is not what it might seem at first glance.

Mr. Letwin: The hon. Gentleman may be sad to hear it, but the answer is yes. We commit ourselves lock, stock and barrel to the acceptance of the propositions put forward by Sir Bryan Carsberg and his colleagues on the committee, and to enacting those recommendations when we return to power in the next Parliament.

Mr. Rammell: I would be interested to learn the terms of reference of that committee and its membership, to ensure that it genuinely is independent rather than something set up to achieve a specific purpose.

Mr. Letwin: I hope that the hon. Gentleman is not calling into question the bona fides of the chairman of the International Committee for Accounting Standards, who is also probably Britain's most distinguished living accountant. He will be accompanied by senior partners from major accounting firms and others whose integrity is unimpeachable.

Mr. Rammell: I do not question the committee's integrity, but the terms of reference and the overall membership could affect the outcome. The hon. Gentleman will need to convince us that the terms of reference and the membership were structured so that an objective outcome would result.
It has been said that the Bill would have been an ideal subject for pre-legislative scrutiny and I agree, especially as there is a cross-party consensus on it. That is when we are most in danger of allowing things to slip through. The Child Support Agency is one example of that happening, as we have learned to our cost. I understand the time constraints under which the Government have operated, but it would have been better if we could have created an opportunity for pre-legislative scrutiny.
The hon. Member for Kingston and Surbiton (Mr. Davey) said that it was more than 80 years since a Government had been defeated on a budgetary measure. That statistic demonstrates the power of the Executive over the legislature, and in response we need an honest and grown-up debate. One of the problems is that every

party in opposition calls for better scrutiny and suggests that it would be a good idea for the Government to be defeated on a financial measure, but every party takes a different view when in government. It would be a brave Government who said that they were relaxed about their estimates being defeated. [Interruption.] I see that my hon. Friend the Economic Secretary is concerned. I do not suggest that this Government need necessarily be that brave Government.
The hon. Member for Kingston and Surbiton also raised the issue of the allocation of proper resources for effective parliamentary scrutiny of accounting and financial issues, and that point is well made. He argued the case for increased resources for the Select Committee on the Treasury or the estimates office. One could also make the case for additional resources for Members of Parliament—in office costs allowance rather than salaries—to enable them to perform the job of scrutiny on those issues. We get the parliamentary scrutiny that we pay for and, at the moment, it is inadequately resourced.
I welcome the establishment and funding of Partnerships UK. The private finance initiative is here to stay and can make a significant contribution to funding public sector projects. However, it must be done in the right way. There will always be a trade off between the cost of doing something through the private sector and the speed at which change can be achieved. The hospital building programme underlines that point. We must expand the knowledge and skills that are available to support PFIs. We often miss opportunities because the skills, experience and expertise are lacking. We also need a clear set of criteria for the way in which Partnerships UK will support PFI on the ground. A limited sum will be available—£170 million has been suggested—and it is therefore crucial that the projects that are supported are those with the greatest applicability and the most ground-breaking.
The Government propose introducing resource accounting to local authority housing finance and, as part of that process, removing rent rebates from housing revenue accounts. I am conscious that that is not specifically within the remit of the Bill, but as it establishes the principle of resource accounting, it will affect that initiative. It was announced by the Department of the Environment, Transport and the Regions last week that proposals would be published in line with the Bill. I strongly support the principle behind the proposed changes, because it is indefensible that under the current system rent payers—instead of the whole community through the general fund—bear the responsibility for funding rent rebates. The Government's proposals will address that issue, but in some local authorities—I declare an interest, because my local authority in Harlow is one of them—negative subsidy is transferred from the housing revenue account to the general fund and that transfer will cease. The process is an historical anomaly, and has been going on for nine years. It has been recognised and supported both by the previous Government and this Government. It affects a small number of local authorities—23 in total—but it has an enormous impact on them—in my local authority, £3.4 million out of a total annual budget of £13.5 million.
The Government have announced that there will be transitional measures to ease that transfer, but those measures will have to last for a very long time. There is a case for the Government dealing with the matter by


making available additional subsidy for what is an historical quirk that affects only a handful of opportunities. I realise that that point is a slight diversion from the main issues being debated this evening, but I wanted to put it on the record.
The Bill is an important first step. The principles are right for what is a long overdue modernisation, and there is consensus on many matters. I hope that we can build on that in Committee and in future legislation. The Bill underlines the extent to which the Government are introducing changes that will give confidence in the structure of our accounting procedures.

Mr. Robert Key: This has been one of those rare non-partisan debates in the House of Commons, and I hope that the Government will agree to the proposition advanced by my hon. Friend the Member for Macclesfield (Mr. Winterton), which has enjoyed wide support around the Chamber. It would be a milestone if that could be achieved.
The Bill will affect all our constituents. I should like to break with the tradition of the speeches made so far and deliver a constituency speech. I want to describe how the Bill will affect my constituents, and to set out what worries me about it. If some criticism of a certain Department should creep into my remarks, I hope that it will be taken in the spirit that I intend.
By far the largest employer in my constituency is the Ministry of Defence. It employs well over 11,000 people there: about half are scientific or industrial civil servants, and the other half are uniformed members of Her Majesty's forces. The Army's Land Command headquarters is in my constituency. The Land Command—the biggest budget holder in the Army—is responsible for implementing the strategic defence review as it affects the Army. It is also responsible for all Army training and therefore for the management of thousands of acres of training ranges. The Defence Estates organisation is responsible for ensuring that the ranges are usable throughout the year.
The whole of the Salisbury Plain training area, which is run from West Down camp at Tilshead, falls within my constituency. The Royal Regiment of Artillery is based at Larkhill, and its procurement processes cover shells, artillery and transport. The nuclear, biological and chemical defence establishment at Winterbourne Gunner is responsible for all the nuclear, biological and chemical training for all three services. The Defence Evaluation and Research Agency has two crucially important establishments in my area—the defence evaluation and testing organisation at Boscombe Down, and the chemical and biological defence establishment at Porton Down. In addition, there is the Territorial Army base at Old Sarum, with which there is also the Royal Gloucestershire, Berkshire and Wiltshire regiment and B Squadron of the Wiltshire Yeomanry. There is also the large and thriving Sea Cadet branch in Harnham—

Mr. Deputy Speaker: Order. The hon. Gentleman seems well endowed with armed forces in his constituency, but I suggest that that is not what the Bill is all about. He should move on to the Second Reading debate.

Mr. Key: I am grateful for your confirmation that I have succeeded in making my point, Mr. Deputy Speaker.
It is now three and half years since we had any defence estimates. The 1996 defence estimates were the last to be produced by the Ministry of Defence. Since then, there has been no proper basis for scrutiny by the House of the estimates of the Ministry of Defence. There has been no proper budget scrutiny of any aspect of how that Department spends £22 billion of taxpayers' money.
The Ministry of Defence has had good reason to claim that the manpower needs of producing such estimates are a problem. Not only has it had to cope with the strategic defence review and the comprehensive spending review, but it has also been to war and had problems of overstretch and increased commitments in all three forces to contend with.
The Bill's proposals to introduce resource accounting with five major statements are very welcome. The statement of outturn will show actual outturn against the estimate, while the statement of operating costs will be analogous to the profit and loss report in company accounts. There will be statements about the balance sheet and the cash flow, and there will also be a statement relating costs to objectives. As a consequence of all that, the budget of the Ministry of Defence will increase from £22 billion to £66 billion. That represents a remarkable impact.

Mr. Letwin: My hon. Friend has said something so astonishing that I hope that he will repeat it. Is he really saying that the total budget outturn of the Ministry of Defence will be closer to £66 billion than £22 billion because of depreciation?

Mr. Key: It will be quicker if my hon. Friend waits until I get to that point in my speech. He knows the problems caused by fumbling through papers, and he has the advantage of the Dispatch Box.
In the previous Parliament, the Select Committee on the Treasury reported on the resource accounting principle. It drew the House's attention to the particular problems of the Ministry of Defence. It stated that each Department would have only one parliamentary Vote, whereas the Ministry of Defence at present has four; that Departments would be able to produce shadow or illustrative resource-based expenditure plans from 1998, even though the full system would not be introduced until 2001; that information on what had been achieved with Ministry of Defence spending—that is, the outputs—and how that compared with expectations—that is, the performance— would be available several months earlier each year than the current departmental reports; and that the documents submitted to the House for financial approval should contain plans and targets for what the spending would achieve.
I was a member of the Select Committee on Defence which reported in the 1996–97 Session that we expected to consider the shadow resource budgets in the next Parliament. We recommended that the Ministry of Defence should publish shadow resource-based estimates in 1998 and every year thereafter. Sadly, that is not going to happen. I regret that very much.
When the proposal was first brought to the attention of the House in 1994 by the then Chancellor, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), the Ministry of Defence immediately went into overdrive. I want to congratulate all the officials in


that Ministry who have worked so hard over the years. An astonishing number of staff have been through a massive training exercise in accounting to prepare for what is a substantial task. However, it was clear by 1996 that there were huge problems to be tackled. I regret that the shadow departmental resource account for 1998–99 will not be published. That is an error, as publication would have been helpful for everyone.
The Ministry of Defence has another problem, and I hope that the Economic Secretary will offer some help on it. The resource accounting manual states:
The normal basis of valuation may not be appropriate if a modern substitute is markedly different in its cost, life or output, or where technological advances have resulted in likely replacements having significantly improved quality or quantity of outputs. Under such circumstances, it will be necessary to undertake a 'modern equivalent asset' calculation to arrive at a replacement cost for the asset.
I am not an accountant, but I understand that that is a perfectly acceptable accounting principle. The problem with the assets of the Ministry of Defence is that modern substitutes for many items of equipment have the potential to vary enormously in nature and costs, depending on the defence needs of the country at the time and on the military capabilities of potential aggressors. In other words, a hugely expensive equipment programme costing many billions of pounds may be rendered obsolete.
Eurofighter will be obsolete in 20 or 30 years' time, of course, but it is only a platform for the weapons systems and electronic systems that will be mounted on it. How will all that be accounted for under the new systems? It is clear neither from the Bill nor from the resource accounting manual how such massive changes in the value of assets, which theoretically change the financial viability of the Ministry, should be treated.
There is a huge problem with the valuation of intellectual property rights under the new system. It may be said that the answer is simply the market value of IP rights, but if there is no market value because rights are not for sale, but are secret defence systems obtained on particular terms involving intelligence from the United States, how will intellectual property be valued? How can we value the assets of an establishment such as Porton Down chemical and biological defence?
How do we value deterrence? We have moved away from the cold war, and we must ask from where come the massive new threats facing our country. How can we account for those threats? The defence budget is decreasing. Last week, the French also announced that their defence budget would decrease. Some of the money that the Treasury will regain from defence comes from rationalisation and management of the defence estate, but the Ministry has problems regarding historic buildings or large military bases in the middle of nowhere that have married quarters that could be sold but for the fact that no one wants to live in such remote places. How can we judge their market value? I should be grateful for guidance on that huge problem.
We have had precious little guidance on the sums faced by the Ministry of Defence. In the Ministry's 1997–98 performance report, there were just five lines on resource accounting, under the heading "Project CAPITAL" at paragraph 804. "Modernising Defence", the annual report of defence activity for 1998–99 contains five lines of text, three pie charts, one bar chart and a table. None of it is helpful if one is trying to fathom what is being attempted.

However, I can now answer the question posed by my hon. Friend the Member for West Dorset, because that report states:
From next year, the £22 billion cash budget of the Ministry of Defence will be calculated in a different way, bringing us into line with the best accounting practices of the business world. In preparation for this we have, for the first time, assessed the value of our assets—£66 billion. We will now be able to identify the full (rather than just cash) cost of what we do, a great step forward in helping us to manage our resources more effectively.
The figure of £66 billion is the value of assets, not the increase in defence budget. Would that it were the latter.
The strategic defence review contained five lines of financial text and a pie chart. I thought that the comprehensive spending review would surely let me know what was going on and how the House could scrutinise the Ministry's budget, but it contains even less financial information than the SDR document did.
We should have received a White Paper on defence estimates that would have enabled us to discuss the Bill more satisfactorily. Such a White Paper was promised for last summer. It would still have been three years since the previous one. We were later promised that the White Paper would be produced before Christmas, but it will not be. The traditional two-day defence debate is being slipped into the new year because it cannot be held until the Government have received the report of the Select Committee on Defence on the estimates, which will not be published until early next year. I regret that matters have slipped further and further back.
My final point bears on the accounting that the Bill introduces. Today, the Defence Committee's report on the OCCAR convention was published. OCCAR is the organisation for joint armament co-operation, which was established in November 1996. The acronym stands for the French title, the organisation conjointe de coopèration en matière d'armaments, but OCCAR is shorter.
The report points out the difficulty of achieving resource accounting—any accounting—if we stray across joint procurement with other Governments who use completely different systems. The juste retour system has operated previously, meaning a carve-up between the Governments who put money into a project. I am glad that that system is being abandoned, but no satisfactory accounting procedure has been produced under the OCCAR convention that would match the system proposed in the Bill. The Government must address that point.
If we are to move towards having a European aerospace and defence company or joint Government procurement projects—the common new generation frigate system that was recently cancelled is an example of where we are not going—we must ensure proper scrutiny and accountability of extra-territorial systems. There will be more co-operation, and, in defence, that means Government-to-Government deals, rather than deals involving the private sector, but I see no mention in the Bill of such systems of scrutiny.
I am glad to have been able to put those points on a matter that will affect my constituency hugely. All hon. Members could offer similar stories. I support the principle of the Bill, but I hope that the Government will make sensible arrangements that allow us to proceed.

Mr. Barry Gardiner: The Chief Secretary to the Treasury set the welcome tone of the debate by his willingness to take interventions from both sides and by his commitment to listen and to enter into dialogue with the Public Accounts Committee and other bodies so that we may work through the perceived criticisms of the Bill as it stands.
Resource-based accountancy and budgeting will bring enormous benefits that will be welcomed by right hon. and hon. Members on both sides. It will ensure that the full economic costs of Government activities are properly measured, improve the way in which capital spending is treated in Government accounts, and explicitly link departmental goals to departmental spending.
However, parts of the Bill have given hon. Members pause for thought. My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) spoke eloquently of the need for parallel operation. Part of the process of building towards resource accounting and budgeting has been the trigger points.
Trigger point 2 said that Departments should provide opening balance sheets for the 1999–2000 financial year on a resource basis. That was due to be implemented by June. In July, however, the Treasury did not report that all Departments had met that trigger by providing resource-based opening balance sheets. Instead, it said that all Departments were on track to produce auditable resource accounts for 1999–2000. The clear implication was that trigger point 2 had not been met. Will my hon. Friend the Economic Secretary clarify exactly how many Departments succeeded in preparing resource-based opening balance sheets by June? If she cannot, will she write to me?
Trigger point 3 said that all Departments should prepare dry-run resource accounts for 1998–99 by autumn this year. The Treasury was due to report on progress by the turn of the year, but the Chief Secretary said that he believed that report would be forthcoming in February. As the current Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), pointed out earlier in the debate, the NAO expected 53 dry-run accounts by mid-August, but, by the beginning of November, only 22 had been received. Will the Economic Secretary advise the House how many Departments, at today's date, still have not supplied the NAO with the dry-run accounts that were due earlier this year? If she cannot give us that information this evening, perhaps she could send it to me.
Will the Economic Secretary confirm whether every branch of the Treasury itself has supplied the dry-run resource-based accounts for 1998–99? If, as I believe, there are significant delays, I have two further questions: why has the Treasury not exercised better oversight of Departments in maintaining the timetable that was set, and on what basis does the Treasury request that the House proceed with the introduction of resource-based accounts when we have not had the opportunity to see a draft set of resource-based accounts for every Department against a cash-based set?
The Chairman of the Procedure Committee, the hon. Member for Macclesfield (Mr. Winterton), alluded to the Committee's second report, on resource accounting and budgeting, published in June 1998. The report concluded:
We are unwilling to give the plans our unqualified approval until we are sure the timetable will allow outstanding problems to be identified and resolved before the new system is introduced. It is

important that the Treasury reports progress against the 'trigger points' to Parliament, and that any delay is explained promptly. The decision as to whether the target date for implementation is still viable must not be taken on the basis of information available to the Treasury alone.
Have dry-run resource accounts automatically been made available to the relevant departmental Select Committees, as the Procedure Committee requested?
In his opening remarks, the Chief Secretary said that he continued to regard the triggers as extremely important. Will the Economic Secretary assure us that implementation of resource accounting and budgeting will not occur until all those important trigger points have been met? Will she confirm that the Bill, which contains no mention of trigger points, overrides the commitments given by the Treasury on the series of trigger points? I urge my hon. Friend to adopt the old Latin motto "festina lente" as her guide; let us make haste slowly on this matter, lest we make no progress at all.
The Government want to stop cash-based accounting from April 2001. The Chief Secretary must reassure the House that Departments will be ready to go live at that time. The only way to do that properly will be to have parallel accounts from April 2000. The Bill not only gives the Treasury the power to vary the date of implementation of resource accounting, but, in clause 18, it provides the Treasury with the power to specify different dates for the production of accounts. Those powers should be vested not in the Treasury but in Parliament.
If the Treasury were given such power, it would be equivalent to a company, under the Companies Acts, being able to produce its accounts at any time of the year that it chose—any time that it deemed suitable and found convenient. We would not accept that as a way of regulating companies; we should not accept it as a way of regulating Government affairs. I trust that the Economic Secretary will consider such a clause from the perspective that Labour Members retain from opposition—not simply from the perspective of Government.
Other right hon. and hon. Members have made much of the fact that the Bill honours the letter, but not the principle, of the Exchequer and Audit Departments Acts of 1866 and 1921. I disagree; there has been a fundamental change to the letter of the law. In the 1866 Act, the Comptroller and Auditor General is given a right of access. It says:
In order that such examination may as far as possible proceed pari passu with the … transactions of the several accounting departments, the Comptroller and Auditor General shall have free access, at all convenient times, to the books of account and other documents".
The Bill says not that the CAG "shall have" but that
A department shall … allow … access at all reasonable times to any record relating to the department's accounts and"—
a Department shall provide—
explanations of the department's transactions to the Comptroller on request.
That is the difference between access as a right of the Comptroller and access as an obligation on a Department. To give someone a right to access and to put a Department under an obligation to provide that person with access are very different beasts indeed. The legislation has not merely been updated; the burden of legislation has shifted.
I believe that the Government have no intention of changing the effect of legislation in this matter, but they cannot vouchsafe the same good intentions for future


Governments. Many Members have pointed out that changes in the organisation of government have led to Governments spending money in ways other than simply through Departments. Currently, we have executive agencies, executive non-departmental bodies, national health service bodies, local spending bodies and contractors. They all spend money to which the CAG has no statutory right of access. The Housing Corporation spends £1 billion of public funds each year; English Partnerships spends £250,000 million, and the Environment Agency spends £300 million. There are NHS bodies, housing associations and training and enterprise councils. The private sector prisons contract alone is for £4 billion. The NAO has a statutory right of access to none of those; access must be negotiated through Departments.
It has already been pointed out that the Bill does not change that situation—that is absolutely correct. However, is it right that the Bill does not change the situation? I urge the Government to consider whether this would be a convenient and proper time to introduce right to roam legislation to give the CAG an unfettered right to roam wherever public money is being spent—to give him the right to pursue and to scrutinise those funds wherever they are spent and by whom. By extending the scope of the Bill in that way, the Government would reduce problems for themselves in the future. I remind the Economic Secretary that, for every new executive non-departmental body set up since May 1997—from the Commission for Health Improvement and the Competition Commission to the National Endowment for Science, Technology and the Arts and the eight Regional Development Agencies—the Government have asked the CAG to be the auditor and have laid the accounts before the House of Commons. The Government's practice has, therefore, been absolutely unimpeachable. However, Labour Members ask the Government to set in statute what they already grant in practice and what we commend them for.
I remind the House that, on occasions, the Comptroller and Auditor General has not had such access to bodies set up by the previous Administration. When it came to investigating the national lottery, the Government and the Department for Culture, Media and Sport said that access should be provided. However, Camelot and its private auditors refused to provide that access. Fortunately, the National Lottery Act 1998 was before the House at that time and it was possible to incorporate into it a provision to give the Comptroller and Auditor General access to the national lottery. Such a convenient and easy remedy will not always be before the House to provide the Comptroller and Auditor General with access to any organisation to which he does not have a statutory right of access. Given the enormous sums of public money that are spent through such organisations, it is vital that the Comptroller and Auditor General should have such access.

Mr. Sheldon: My hon. Friend refers to a most important matter. The regulator of the national lottery gave the contract to Camelot after one its directors had given certain advantages to the regulator himself. That was a major scandal, and it was only because the National Audit Office was able to investigate that we knew about it.

Mr. Gardiner: I am grateful to my right hon. Friend for those remarks, which have clarified the point that I

was trying to make. I am a relatively new Member and it is always difficult to know quite how to approach one's colleagues on the Front Bench when one believes that they could improve a Bill. To do that with the support of my right hon. Friend the Member for Ashton-under-Lyne is, I trust, one way of approaching them with impunity.
I was disappointed when I read the Opposition amendment; I thought that it was disgraceful. This subject has been handled quite properly through the Select Committee procedure of the House and by discussions between the Chairman of the Public Accounts Committee and Ministers. The Government have shown their openness and their willingness to engage in dialogue on these important matters, but the Opposition amendment sought to make cheap party political capital. Therefore, I was delighted when the hon. Member for West Dorset (Mr. Letwin) agreed not to press the amendment to a Division on condition that a Special Standing Committee is set up. Such an approach is far more in keeping with the way in which the House has sought to tackle this subject and with the great consensus that has been apparent on both sides of the House.
I am grateful to my right hon. Friend the Chief Secretary for the tone that he set for the debate, which has been one of dialogue and openness to the points that have been made and that will continue to be made. I hope that, in Committee, we can achieve progress on the Bill, because it is fundamentally important. The Gladstonian principle, which was set in 1866 to allow the Comptroller and Auditor General the right to follow public funds wherever they go, is one that the House should hold dear and cling on to.

Mr. Charles Wardle: I agree with much, if not all, of what the hon. Member for Brent, North (Mr. Gardiner) said. He and I heard the same briefing in the Public Accounts Committee last week and I shall voice some of the concerns that he has already expressed. However, it has become increasingly clear from this thoroughly interesting debate that the Bill is half-baked and that right hon. and hon. Members from both sides of the House seem to have come to that conclusion.
The Bill is unlikely to attract popular media attention if for no other reason than its dry-as-dust title. Government resources and accounts is not a subject likely to pack the House. Nevertheless, it is fundamentally important to the machinery of government as we have seen from the quality of the contributions that have already been made. The Bill will change the basis on which Parliament funds Whitehall and the way in which the users of the funds then account for their performance. I intend to spend a few minutes enthusing about the principle of resource accounting before discussing what I and others see as flaws in the Bill. I am deeply encouraged by the offer made by my hon. Friend the Member for West Dorset (Mr. Letwin) about how the Bill should proceed after this debate.
After years of prodding and cajoling by the City and industry, as well as by those Members from both sides who have experience of the commercial world, the business of government is at last switching from cash accounting to resource accounting. It is not so long ago that Departments were unable to distinguish between capital account and current account expenditure.


Now they will enter the next century with profit and loss—or, at any rate, income and expenditure— statements, balance sheets, depreciation and cash-flow analysis. They will be able, if they mean business, to define their operational plans in terms of budgetary projections against which they will be able to measure their own performance by means of management accounts that will highlight favourable or adverse variances against the budgets that they have agreed and to which they are committed.
Performance-related pay will emerge from the shadows as a realistic incentive because performance will be measurable. Better still, the preparations of plans and budgets and management accounts will enable senior officials, if they so choose, to assign measurable targets, goals and objectives down the management line to individual middle-ranking civil servants who will have an opportunity to own the tasks delegated to them and to see for themselves the results of their efforts.
For years, the best-run private sector businesses have empowered middle management within their organisation with real responsibility and an awareness of their employees' contribution to the larger enterprise. Resource accounting should open the same door to junior grades of the civil service, who have hitherto worked loyally and conscientiously but without any means of measuring and accounting for their own efforts.
If all that works as it should, I predict that Whitehall management will discover a new flexibility and informality, and whole tiers of high-ranking officials may find it increasingly difficult to justify their old-style roles. Mandarins who have demanded, and got, salaries comparable with those paid by moderately successful private sector companies will find that the competition for top jobs hots up as more company executives are head-hunted into a public service where the business systems will no longer be regarded as quaint and incompatible.
The scope for public-private partnership enterprise should become much more meaningful because the City will be able to assess and review, on a basis comparable with the private sector, the accounts and financial track record of those parts of the public sector being injected into such partnerships.
There is little doubt that the whole process of privatisation over the past 10 or 15 years would have delivered higher proceeds for the taxpayer if the public sector businesses being sold had regularly produced their accounts on an accruals basis before privatisation, because that would have given institutional investors a clearer idea of what they were bidding for. Equally, it must be said that without the impetus of privatisation, Whitehall would probably still be resisting resource accounting.
A better-run Whitehall is, at least, the theory of the changes presaged by the Bill, which could and should deliver better standards of management performance. That is why I have been an enthusiastic supporter of the switch to resource accounting, but there are already a number of danger signals concerning the Bill which have been touched on in today's debate and which the House simply cannot ignore.
I shall focus briefly on just three of those dangers. The first is that the pace at which resource accounting has developed means that Whitehall is already in peril of

trying to run before it can walk. It is only in the past couple of years that Departments, most of which have precious little in-house accounting and information technology skills, have begun to grapple with the changeover from cash accounting to a resource-based system.
It is therefore essential that Parliament is given clear evidence that resource accounting is adequately tested and up and running in Whitehall before the Bill takes effect, as several right hon. and hon. Members have said. That is crucial because the Bill repeals the existing audit powers that flow from the Exchequer and Audit Departments Acts of 1866 and 1921. Since the statutory authority for the work of the Comptroller and Auditor General and the function performed by the Public Accounts Committee on Parliament's behalf will in future be contained in the new legislation, it would be disastrous if resource accounting were not working smoothly by the time that the Bill reached the statute book.
As the House has been told, two and a half years ago, the Treasury gave the Public Accounts Committee a specific assurance that the date for the changeover in accounting systems would be decided in the light of progress, which would be judged against a number of yardsticks. The Treasury gave a clear undertaking that the two systems would be run side by side to ensure that the changeover went according to plan.
If, however, the transfer is not done efficiently, and the Treasury persists with its intention to discard the old cash system by April 2001, there will be a risk that Parliament will be unable to hold the Executive accountable for the money that they have been voted. As it stands, the Treasury is saying about the Bill, "Trust us. We'll get it right." One has only to recall the plans and promises made over the past decade in advance of new IT systems installation in Whitehall, which subsequently came to grief, to appreciate that we shall all have to keep our fingers crossed and hope that the Treasury is up to the task.
The second danger concerns the missed opportunity or, dare I say, plain refusal by the Treasury, to take advantage of the first major public accounts legislation since 1983 to extend the scope and powers of the Comptroller and Auditor General. If anything, the Bill is more restrictive of the CAG's audit powers. It does not put right the glaring anomaly whereby the CAG is at present unable to follow the audit path of public funds made over to new forms of service providers such as private companies working under contract to the Government, or voluntary bodies that are allocated large sums of taxpayers' money to carry out programmes approved by Government.

Dr. Palmer: The hon. Gentleman is going even further than previous speakers in seeking to include voluntary bodies in the Bill. Is he suggesting that anyone who receives a lottery grant should suddenly be subject to investigation by the National Audit Office?

Mr. Wardle: No, that is not what I am suggesting, but where there is a contract between the Government and another body which involves taxpayers' money, the audit path should be clear and unfettered, and the CAG should be able to proceed, as the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) have said.
As we have heard, there is no provision for the CAG to be the auditor of all non-departmental public bodies, as he should be, or of limited companies set up by central Government bodies.
Most controversially, the Bill provides for large-scale financial assistance to be made available to the body to be established to carry on public-private partnerships, without giving the CAG access of his own to that body for audit purposes. Yet it is to the Comptroller and Auditor General that Parliament turns, via the Public Accounts Committee, for accountability of the public funds for which it has voted.
The Bill makes no provision for the Comptroller and Auditor General to audit the operational performance measures that Government Departments will be encouraged to publish, once they have become sufficiently familiar with resource accounting. In that respect, the Bill as it stands is a wasted opportunity. I hope that the Government will consider making suitable amendments in Committee, and that appropriate gestures will be made when the Economic Secretary winds up the debate. If that is not done, it will be difficult to avoid the conclusion that Whitehall is trying to fence out the Comptroller and Auditor General and the National Audit Office, possibly because they have become too effective at uncovering the management shortcomings of some Departments. That is a cynical view, but one is tempted to draw such a conclusion.
The third and final danger is the Bill being pushed through without adequate consultation. We must gather the views of as many seasoned financial experts as possible. No doubt, the chief accountancy adviser to the Treasury has had his say, but there appears to have been insufficient dialogue with the Comptroller and Auditor General. Moreover, it is, to say the least, careless of the Government business managers to have scheduled Second Reading of this Bill on a day that the Public Accounts Committee has been sitting.
The Acts of 1866, 1921 and 1983 were all the subject of close prior consultation with the Public Accounts Committee, at a time when that was by no means the norm in respect of other legislation. Yet, at a time when the Government make a virtue of carrying out wider pre-legislative scrutiny and using special Standing Committees, the Treasury appears to be cocking a snook at the Public Accounts Committee—inadvertently, I am sure—and at Parliament.
Unless attitudes change and the Minister decides to send the Bill to a special Standing Committee, it will be difficult not to conclude that, having been dragged into the 20th century just before that century passes into history, Whitehall is determined not to endure the scrutiny that the proposed accounting changes will allow. That would make a mockery both of the Bill and of the accountability of Government to Parliament.

Mr. David Kidney: I apologise for having missed the beginning of the debate. Most unusually, the Select Committee on the Treasury sat this afternoon, and I had to attend that sitting.
It is something of an exaggeration to say that, in the pubs and clubs of Stafford, people speak of little else but resource accounting and budgeting. However, I am sure that they will be as impressed as I am if this great project

is brought in on time, for 2001–02. It is a mammoth task and its being achieved on time will reflect creditably on Parliament, on the Conservative Government that set us on this path, and on the current Government.
I have listened to the pointed questions asked by my hon. Friend the Member for Brent, North (Mr. Gardiner) about the Treasury accounting for the performance of Departments against the trigger points so far. I shall be interested to hear the Economic Secretary's responses to those questions.
The shift from cash-based to accrual-based accounting requires legislation to amend Acts dating from 1866 onwards. We are witnessing a thorough reform of public finances when the resource accounting and budgeting process is seen alongside the new economic and fiscal strategy framework, the new three-year rolling settlements for public services spending, the separation of capital expenditure from revenue expenditure, and the two rules for capital investment: the golden rule and the sustainable investment rule.
I ask myself, to what end are all those changes being made? The first permissible aim for which we should be aiming is a clearer understanding of public finances— clearer for parliamentarians, for potential partners and for the public at large. The second permissible aim is to improve the performance of "UK plc", especially in the sphere of capital investment. I shall concentrate on two aspects: first, the public process of scrutiny, budgeting and accounting; and, secondly, the effect of the reforms on capital investment.
As for the public process, I have found useful the Treasury's guide of April 1999, entitled "Resource Accounting and Budgeting. A Short Guide to the Financial Reforms". It suggests that the two great benefits from the process are, first, to improve transparency, making it easier for taxpayers to see what they are getting for their money and, secondly, helping us to improve the process of deciding where to allocate resources to achieve the best results.
The system of Parliament supplying money to the Government to spend has never been set down in statute. It relies instead on established usage. The Bill sets out no proposals to make any change to that system. In effect, Parliament decides the procedure by which we grant supply and the Treasury decides the definitions and form of that supply.
Parliament wants very much to retain annual accountability for the resources voted by it to the Government, so it is suggested under resource accounting and budgeting that the first content of the Government's departmental accounts will be a summary of the resource outturn. This will include what remains effectively of the cash requirement from past voting procedures for supply, called now the financial requirement. That is the equivalent of the cash requirement plus the borrowing permissions. That much we will remain familiar with, but because of the change to accrual-based accounting for everything else it will take some time for us as parliamentarians to follow the change from the one system to the other.
Perhaps we shall be more familiar with the second, third and fourth parts of the content of the new accounts. First, the operating cost statement will look like a profit and loss account. Secondly, the balance sheet will speak for itself. Thirdly, there will be the cash flow forecast.


These will look very much like the information that is provided in the private sector. That feeling is enhanced by the fact that the resource accounting manual will apply wherever applicable to generally accepted accounting practice, which is the same in private practice. The Comptroller and Auditor General's certificate will give a true and fair view of the accounts, which is the same standard as that which applies to private sector auditors.
The fifth content of the new accounts will be a statement of resources by departmental objectives. The explanatory notes in the Bill call this a statement relating costs to objectives. The idea is that Departments will match resources to meeting objectives as expressed in their output and performance analyses. These analyses are something new. There were draft ones last year and they will be finalised next year. Then along came the comprehensive spending review with public service agreements. There is a great source of misunderstanding one from the other. It is reassuring that the Treasury guide of April 1999 states:
The output and performance analysis will also be consistent with, and complement, departmental public service agreements.
That is a welcome statement for the future development of two slightly different statements of the same thing.
As for the avalanche of information coming our way, the same Treasury guide states:
This demonstrates the significant increase in the amount of information in Resource Accounts compared with Appropriation Accounts.
It is true that there will be much more information, but I return to the point that it will still be difficult for us to wrestle with the changes and what I would call the shifting sands. It will involve keeping an eye on resource accounting and remembering the financial requirements that we are voting for each year.
We shall also be treated to departmental investment strategies, departmental plans in the spring and departmental reports in the autumn. Despite all the additional information, I would like to echo the concerns that some hon. Members have mentioned about the way in which the important output and performance analyses seem to be detached from the rest of the statements which will be properly audited and accounted for.
On capital investment, the Chancellor has already made welcome changes by separating capital expenditure from revenue expenditure. That protects necessary long-term investment in our infrastructure from short-term pressures on the revenue side. He has also reversed the long-term decline in investment in the country's infrastructure. All that is to the good, even before we come to resource accounting and budgeting.
Clear accounting, like resource accounting and budgeting, is welcome, but does not in itself cause any more investment to be made in infrastructure; policy decisions do that. In my view—I may be echoing an earlier plea from my hon. Friend the Member for Harlow (Mr. Rammell)—we still need much more capital investment in our infrastructure. I accept that that investment ought to be subject to clear objectives and clear investment appraisal criteria, but the need still exists, as we see every day in our work.
I welcome public-private partnerships in bringing more private sector investment in our infrastructure, but public sector investment is needed at a faster pace. In local

authority housing, for example, welcome though the capital receipts initiative has been in allowing councils to invest in the upgrading of their existing housing stock, there is still an urgent need for more social housing. Local government needs more than the one option that it has at present for raising finance—large-scale voluntary transfers of existing housing stock.
On Partnerships UK, the proposed successor to the Treasury taskforce, it is important to remind ourselves that in its two years of existence, the taskforce has been extremely successful. The number of NHS projects has risen from none in May 1997 to 37 major schemes now. Investment attracted into our infrastructure has risen from virtually nil in May 1997 to more than £4 billion now. The Treasury taskforce was established for a limited lifespan of two years, and its two years are up.
The proposal for Partnerships UK arises out of the second Bates review of the private finance initiative. There is welcome news in the second review for those Labour sceptics who are not sure about the efficacy of PFI schemes. Bates has led the way in reducing the complexity of PFI contracts and therefore in reducing consultancy costs, and has clarified the use of public sector comparators, so that we can decide which contract ought to attract purely public sector investment, which some still do.
The Bates review explains the need for protecting the pensions of employees who transfer under TUPE—the Transfer of Undertakings (Protection of Employment) Regulations 1981—and the second review has gone so far as to explain that there is not even a requirement that staff who go with the contract must transfer from their present employers to the new contractor's employment. Those are great benefits from the second Bates review.
Partnerships UK should continue to build up the body of expertise that the taskforce started to amass. It ought to be able to produce more standardised formats for the contracts for private investment, and tackle politically sensitive big contracts and those that are creating replicable models.
Concern has been expressed about a possible conflict of interest because of the additional power of Partnerships UK to take an equity stake in the contracts that it promotes. The reason for the conflict of interest is that PUK will be advising a Government Department how to get the best deal for the contract, and also potentially taking an equity share in that contract's benefits. That is one possible criticism of the set-up of Partnerships UK. The reverse of that coin is the danger of cherry picking if Partnerships UK accepts the easiest contracts, which would have attracted private finance anyway. It would thus risk not fulfilling its brief.
A Library research paper on the Bill explains the way in which Partnerships UK can avoid a conflict of interest. However, it might be best if it concentrates initially on its advice role and on getting contracts to succeed, and leaves the investment role to the private sector when possible.
The Bill is a modernising, if not earth-shattering measure. Taken with other reforms, it will make public finances more understandable. Clear accounting procedures are desirable, but, in themselves, they do not provide better services, better value for money or more capital investment in our infrastructure. Quality policy making and scrutiny are required to secure those objectives. Those are the challenges for the Government and for Parliament.

Mr. Philip Hammond: I am grateful for the opportunity to make a brief contribution to the debate. Debates on such subjects tend to attract specialists: members of Select Committees, including the Public Accounts Committee, and people with banking or accountancy experience. I claim no such expertise. My interest in the Bill derives from the specific references to the national health service in clauses 12 and 13. I want to ask one or two simple questions about the way in which the Bill will treat the Department of Health and the NHS.
I understand the desire for greater openness, authenticity and transparency in public accounts, and especially the importance of having a sense of the way in which we consume the capital that is used in providing public services. That is a laudable objective, and I note the consensus on it. However, we must consider whether the Bill will achieve that objective. There is a danger that the large measure of discretion that the Bill grants the Treasury will create a mere illusion of greater openness, which could lead to a sense of false security.
The reaction of Departments and parliamentary draftsmen to difficult or seemingly intractable problems is often to grant themselves unfettered discretion. My hon. Friend the Member for West Dorset (Mr. Letwin), whose return to the Chamber is timely, mentioned unfunded state pension liabilities and their exclusion from the Bill. That exclusion highlights the problem of trying to examine the public sector and Government activity as parallel to that of the private sector. The unfunded obligations of the state for future state pensions are unquantifiable because the state reserves, as many pensioners would say that they know to their cost, the right to change its obligations unilaterally and without notice. It would be problematic to quantify those liabilities. That underlines the nature of the state as a contracting party and highlights one of the difficulties of trying to view the state's liabilities as parallel to those of the private sector.
A major point of having standard and codified accounting practices is to allow continuity and also comparability, both between different systems and across different periods. People who use accounts in the real world will readily acknowledge that that is one of the most important uses to which they put them. I suggest that the discretion that the Treasury will have under the current proposals will undermine the core—the very point—of the exercise. Another important point of producing accounts in a standard and recognisable form is to have clear sight of the assets that are employed and measure their effective use and consumption—the consumption of capital.
I am not unmindful of the mood of consensus surrounding the debate, but I feel obliged to say that, since May 1997, we have seen a consistent and deplorable manipulation of figures and the presentation of public accounts. The most notorious example is the misclassification of the working families tax credit as a negative tax with flagrant disregard for the Office for National Statistics and all international conventions.

Mr. Andrew Love: The hon. Gentleman seems to be arguing the case as outlined in the Opposition amendment, but does he accept that the Government's introduction of resource accounting is consistent with

generally accepted accounting practices and that they have set up the independent Financial Reporting Advisory Board in order that what he is suggesting will not happen?

Mr. Hammond: As my hon. Friends have said from the Front Bench, we welcome the principles involved and if we were convinced that what the hon. Gentleman has referred to would be achieved by them we would be very happy indeed. However, the large degree of discretion that the Treasury is retaining for itself gives us cause to doubt that that will be the case.
On the basis of our experience over the past two and a half years, we have little reason to accept that transparency is the Government's principal objective. The explanatory notes that have been made available with the Bill say that its purpose is to take the focus away from cash and on to resources, but Government announcements, particularly since the completion of the comprehensive spending review, have wilfully and deliberately focused on large sums of cash. They were presented in an extremely misleading way and, on some occasions, there was double or triple counting, which enabled them to magnify in the public eye the significance of what they intended to deliver in terms of public spending. I suggest that they exploited the ignorance of the vast majority of us, who do not understand the complexities of accounting and high finance, and after the comprehensive spending review announcements the early indications were that most of the serious press had been effectively deceived.
My hon. Friends have said that, on the basis of what is in the Bill and the resource accounting manual, large and important assets, liabilities and activities are to be excluded from this initiative. I intend to focus for a few moments on the Department of Health and how the Bill will affect the role of the national health service in departmental and whole of Government accounts. Obviously, we are considering only a framework and we have to work from the latest version of the resource accounting manual, which tells us that Department of Health accounts will broadly be drawn up on the basis that the purchasers in the NHS will be included within the resource accounting boundary, but the providers will be excluded. That analysis is slightly too simplistic, because clause 12 tells us that health authorities, primary care trusts and special health authorities will be included within the boundary.
Primary care trusts are both providers and purchasers, and special health authorities are providers of services. It is clear, however, that national health service trusts—the 430 or so bodies that hold and operate hospitals throughout the country—will be beyond the resource accounting boundary. Thus, by what the right hon. Member for Swansea, West (Mr. Williams) described as "an accident of restructuring", the biggest holders of assets and the biggest spenders in the national health service will be excluded.
I ask myself whether there has been a genuine decision to exclude bodies that operate at arm's length from the Secretary of State, but that is not the case. The Secretary of State has and uses considerable powers to direct national health service trusts, and the tendency in recent years has been to centralise that power and to bring those trusts increasingly under central direction from Whitehall.
It could be that there were technical problems in bringing NHS trusts within the scope of resource accounting. I understand that there are genuine technical


problems in the education sector in relation to schools. The hon. Member for Broxtowe (Dr. Palmer) expressed the concern that the best might become the enemy of the good. That is not the case with NHS trusts, because they produce accounts using standard accounting procedures. They are even aggregated in a document. I am not sure whether they are consolidated in the technical sense of the word, but they are certainly all available in aggregated form. As an outsider on the financial technicalities of the debate, I believe that those accounts could relatively easily be incorporated into the Government's proposals.
I wonder whether the politics of this is that the Government like to announce revenue and capital spending by Ministers—sometimes two, three or four times—but are less keen to accept that the outturn of those announcements is a direct part of the departmental responsibility for which the Secretary of State for Health answers. By this "accident of restructuring", a significant part of the activity of a major spending Department is to be beyond the boundary of departmental resource accounting and budgeting. That is an incoherent and unjustifiable split of the Department's responsibilities, and an artificial divide that the Government can easily, and should, avoid.
This matter is of great importance. There are 430 or so national health service trusts with a total spending of about £20 billion, and they hold assets in excess of £20 billion. I am afraid to say that not all those assets are effectively utilised. In 1991, capital charges were introduced into the NHS with the intention of increasing awareness at trust level of the cost of holding assets, especially estate assets. The available evidence to date is that that has not been a particularly effective tool, and there is a strong argument for a greater focus on the assets held within the NHS at national level. I focus my remarks on land and buildings, but I would not like to give the impression that no other classes of assets in the NHS are under-utilised.
I suggest to the Minister that part of the problem is the concept of ownership. The body on whose balance sheet the asset sits will pay a capital charge. It is often, for historic reasons, a small sum in relation to the current value of the asset. That body will often not stand to gain the benefit of a disposal of that asset. Whereas a private sector holder of an asset will seek to earn a return on it or dispose of it, that is not always the case in the national health service.
The NHS is Europe's largest landowner, holding some £23 billion-worth of land and building assets. Anything that we can do to focus on the effective use of those assets and to concentrate on the way in which they are used would be greatly to the benefit of the NHS and the nation as a whole.
I consider it inconsistent and incoherent, in terms of what the Government say they are trying to do, to exclude the provider side of the national health service entirely. There is no good reason for that in principle, and no good reason in practice, as the information is already available in a form that the Government could use. I hope that the Economic Secretary will tell us that she will consider including the entire NHS in resource accounting from the outset, in order to give genuine coherence to what the Government seek to do for the NHS and the Department of Health's resource-based accounts.

Dr. Nick Palmer: In this era of cross-party co-operation, and—who knows—even coalition, it is quite pertinent that we should study the heritage of the Gladstone Government, a Liberal Government whom some would remember as being particularly prominent.
Although the debate has been interesting, at times I have had the impression that non-members of the relevant Select Committees could speak only on sufferance. I am grateful for the offer of education from my right hon. Friend the Member for Swansea, West (Mr. Williams), but I shall attempt to speak immediately, as best I can.
The Bill breaks effective new ground in three important ways. As many have pointed out, one relates to capital spending. I think that we all agree that, in that regard, the change is altogether an improvement, as the effect of the current rules has been to depress public spending. As the hon. Member for West Dorset (Mr. Letwin) illustrated, giving the example of the water industry, if spending must be concentrated on one year, there is never a good year in which to do it.
There is, perhaps, a technical issue here. If we enter a transitional phase, during that phase we may produce a spurious impression of falling investment, because the existing investments have been written off and the new ones will be spread over a number of years. That, however, should not deter us. The prospect of whole of Government accounts is equally welcome to all of us who have worked in the private sector, and we look forward to a similar overview of Government activity.
Although Partnerships UK seems to be a useful initiative, I hope that the Economic Secretary will tell us whether she is confident that the new body will be given adequate support in all regions. I note that my region, the east midlands, benefits far the least from PFI contracts, notwithstanding two major projects in the Nottingham area—the Nottingham tram system and the Queen's medical centre extension.
One issue has not been raised so far—I realise that it is linked to traditional accounting theory. The opportunity has not been taken to change the tradition whereby each year's spending is strictly cash-limited, and any money left over at the end of the year must be returned to the Treasury. That is a practice that we have all encountered in the context of our parliamentary office allowances, and that most of us have encountered in either public or private industry. We all know that it results either in underspending, if the budget is not spent by the end of the year—we see that all over Government—or in wasteful spending, following a panicky dash to get rid of the money before it goes away. I hope that the Government will consider whether improvements can be made.
The main issue that has attracted controversy today is that of direct access by the National Audit Office to a company receiving public funding or working intimately with the Government—or, indeed, any body set up by the Government that is essentially a public body. Several hon. Members have made a distinction between the ability to access those bodies and the ability to get information about them, as set out in clause 11(5). It may be helpful to hon. Members to note that clause 11(5) contains a misprint; the reference should be to clause 10(6)(b).
As I have said in interventions, the danger in pressing for full direct access is that we will subject those bodies, not all of which are administration rich, to double


jeopardy in audits—in fact, in certain circumstances, to a full double audit. That is perhaps most clearly demonstrated by local government, which, as we know, is extremely stretched. It is already subject to the Audit Commission. The proposal is that it should also, in principle, be subject to a partial, or even a full revised audit by the NAO, if it saw fit.
Various possible scenarios have been advanced. My right hon. Friend the Member for Swansea, West gave some examples. One was of an effective second audit that spotted omissions in the first. It is clear that, every time we do a second audit, we will sometimes spot things that were not spotted the first time round, but we would not necessarily suggest that as a normal process.

Mr. Sheldon: My hon. Friend will be aware that the Audit Commission and the NAO work together extremely well and take each other's words for the results of their audits, so the problem that he brings up is not likely to arise.

Dr. Palmer: I am grateful to my right hon. Friend for his intervention. That covers a wide area of the bodies. If the Audit Commission is essentially considered an extended arm of the NAO, that will lighten the burden. However, that is not invariably the case.
My right hon. Friend the Member for Swansea, West referred to a case where the NAO had spotted an illicit embrace in the front office of a chief executive. I agree that that was happy serendipity, but it was not due to any particular skill on the part of the NAO.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) said that further education councils could be looked at, and that the investigation might lead to a specific college, or to a specific supplier working with the college. Again, I understand the reasoning, but, in principle, it would mean that every body that entered a serious relationship with the public sector would be subject to further intervention. That was expressed most clearly by my hon. Friend the Member for Brent, North (Mr. Gardiner), who suggested that the NAO should have a right to roam, which we could perhaps also call a right to fish.
How often would that happen in practice? It could be done frequently. If it is, we should take the example of the Government since the general election and make the NAO the auditor for the body concerned. Where we think that the NAO will often have questions, why not make it the auditor? I encourage the Economic Secretary to say that, as other bodies' audit arrangements come up for review, the Government will look favourably at whether the NAO might be the most appropriate body. In particular, all hon. Members who have spoken would welcome it if Partnerships UK were specifically brought under the NAO's wing.
The relationship can be more tenuous. The example was given of a company that organises bakery operations for a public body. I think that we would agree that the NAO would study the operation of that bakery infrequently. One might reasonably, then, rely on clause 11(5), which enables the NAO to demand information from whoever is acting as auditor for that body. I think that, to some extent, we should allow the Government to act with some pragmatism in establishing the National Audit Office, when appropriate, as the relevant body.
The hon. Member for West Dorset (Mr. Letwin) effectively suggested kicking the proposals into touch, for examination by a Special Standing Committee. In some circumstances, such examination would be very beneficial. In this case, however, it seems that the issues are fairly clear, and have been fairly well illuminated in this debate. I therefore urge continuation of the process, with the normal Committee, so that we might conclude on time and without further delay in passing an important Bill.

Mr. David Rendel: I generally welcome the Bill, which has some good aspects. The new form of accounting for public expenditure introduced by the Bill will undoubtedly give more information to hon. Members, and therefore more and better general control over Government spending. However, I am perhaps a bit more cynical than some hon. Members, as I suspect that the Government are introducing the new form of accounting because it will give them, rather than Parliament, more information and control. Nevertheless, the development is welcome and will give us extra information that we need.
I welcome the Bill also because it will introduce for the first time proper capital accounting. I—like many hon. Members—was once in local government, and it has always struck me as extraordinary that central Government capital and revenue expenditure were accounted for in exactly the same way, all mixed up in one pot, whereas, in local government, capital and revenue expenditure were differentiated, and the real value of capital expenditure compared with revenue expenditure becomes much more obvious to everyone concerned.
One of the possible interesting spin-offs of the new form of accounting is that, by showing everyone the real value of long-term capital investment, it may make the private finance initiative rather less attractive than it has been to date. I do not think that that point had been mentioned so far in the debate.
The real value of the new form of accounting will be to give everyone better control of expenditure. Nevertheless, as my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) said, I hope that the Government will also see fit to ensure that we shall be able to use that extra information and control by providing, when necessary, training for hon. Members. One of the extraordinary aspects of this place is that, although many of us are elected without any real experience of audit, accounts or business, without relevant training, we are expected to try—in Select Committees and other forums—to control and monitor Government expenditure. I hope that Ministers will take on board my hon. Friend's point on that matter.
What is wrong with the Bill? As hon. Members on both sides of the House have said time and again today, our main concern is the lack of power provided in the Bill for the Comptroller and Auditor General and the National Audit Office over expenditure in some spheres of Government accounts. I hope that hon. Members, by repeatedly hammering home that concern, have finally made the point to Ministers—if we had not already done so—that we really are concerned about the issue, which they really have to address quickly.
Every organisation needs an audit office and some type of external audit function to help it control its expenditure, and the Government need one perhaps more than anyone.


I was once an internal auditor for Esso Petroleum. This year, on joining the Public Accounts Committee, I was staggered when I discovered that, in contravention of the basic principle of audit, the National Audit Office did not have full access to all Government expenditure whenever it wanted such access. It is quite extraordinary that, over the years, hon. Members have allowed a system to grow that does not allow our auditor to have full access to all Government expenditure.
I should have liked to have time to make various other points—particularly on Partnerships UK, although the important issue of the possible conflict of interest has already been raised. It is perhaps worth considering one brief example of what might have happened if Partnerships UK had been in charge, for example, of the contract to write a new national insurance recording system.
There were already many problems with writing a new system. If the whole project had been done at rather greater arm's length, with a body intervening between Parliament and the body writing the system, it would have been much harder for us to detect problems with the system and to report them to Parliament. The dangers of the NAO not having full access to all aspects of public accounts are clear, and should be clear to every hon. Member.
The Chief Secretary started the debate by saying that the Bill was not supposed to overhaul the whole audit process. I accept that that was not his original intention. Nevertheless, it must be an opportunity to bring back under the auspices of the Comptroller and Auditor General some aspects of Government expenditure which currently are not in his remit. We should be taking this opportunity to make sure that the powers of the CAG are extended as far as possible.
Even if this Bill cannot now be changed—and even if the Government are unwilling to guarantee tonight that it will be changed to give full access to the CAG in future—I hope that the Economic Secretary will accept the principle that the CAG should in future have access to all Government expenditure whenever he wants it.

Mr. Howard Flight: This has been an important and valuable debate—essentially more parliamentary than party political. We hope that our proposal not to vote against the Bill and to see a Special Standing Committee investigate issues raised on both sides of the House will be accepted by the Government, as everyone saw that it was made spontaneously.
Gladstone has been much cited. He would be turning in his grave if he were here and realised the extent to which his intentions for full accountability for Government expenditure to Parliament had gone off the rails. No one is objecting to resource accounting. Indeed, it is amazing that we are at the end of the 20th century and the Government still have cash accounts. Perhaps that is a comment on our processes, and on some of the things that are wrong with this country.
There is consensus that the Bill needs changing. My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) referred to it as half-baked. I would have said simply that Sir Humphrey had had a heavy hand in the drafting of the Bill. There has been consensus that

there is a problem, in that the NAO and the Comptroller and Auditor General cannot follow public money wherever it goes. Under the Bill, the CAG will not be certifying the regularity of accounts. He will be merely certifying that expenditure has been spent—not how it has been spent.
On the PFI and Partnerships UK proposals, I congratulate the Treasury taskforce, which has done an excellent job in accelerating the number of PFI deals. The taskforce appears to have cut through a lot of the bureaucratic problems that stood in the way in the past. The proposals for Partnerships UK are, in essence, to say that a talented and skilled team should be put into a majority private sector-owned body and paid commercial salaries. I have grave reservations about whether that will work.
It seems that the taskforce is doing essentially a public sector job. I suggest that it might be better to have a permanent taskforce whose members are paid private sector salaries within the Treasury. There is no real reason why that is not do-able. I note that the CAG staff earn private sector salaries.
How is the £1 billion balance sheet going to arise? Ministers have said that they expect one third of PFI projects to be handled under this scheme. Partnerships UK is to put up seedcorn money to local authority projects to finance feasibility studies. It will become impossible to avoid getting caught up in financing syndicates, or even in organising the syndicates that tender for sub-contracted contracts.
If that happens, there will be an impossible conflict of interests, with a private sector body having privileged access to public sector business. The industry is concerned and the Government have not said as clearly as they might what Partnerships UK's territory will be.

Mr. Love: Is it not appropriate that the body that deals with public-private partnerships should itself be a public-private partnership?

Mr. Flight: With respect, the hon. Gentleman misunderstands its role. The Treasury taskforce has been effective in sorting out the public side of the proposals and then going to the marketplace for people to put together the syndicates, make tenders and find the finance. It has a specific role, working with the Departments, local authorities—if relevant—and the Treasury. One of my concerns is that the team will lose the good will of the Treasury and the Departments when it moves to the private sector.
We certainly do not object in any way to resource accounting—we started it—but there are considerable problems and a lot is missing. Hospitals, schools, roads and defence are excluded on the assets side, and pension and PFI liabilities on the liabilities side. Nothing in the Bill clarifies definitions to make it a little easier for the citizen to understand what is going on.
Key clauses clearly give the Treasury the power to define whatever it sees fit and produce accounts as it sees fit. There is no independent body to verify that accounts are true and fair. The Bill is a triumph of presentation over substance in that area, as my hon. Friend the Member for West Dorset (Mr. Letwin) said.
I pay tribute to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) for his contribution. He spoke with many years' experience of the fundamental


issues and was the first to assert the relevance today of the principles of Gladstonian parliamentary accountability. He made the point that Parliament has less rights than the European Court of Auditors to scrutinise expenditure and that less than half of non-departmental expenditure of Government moneys is scrutinised by the Comptroller and Auditor General. He pointed out the fact that there is no provision in the Bill for the Housing Corporation or the Environment Agency.

Dr. Palmer: Does the hon. Gentleman believe that as long as those various areas are not included, resource accounting should not be introduced?

Mr. Flight: Others have given the answer. The Bill as it stands raises a host of issues that it would be better for the Public Accounts Committee to consider before legislation is rushed through. If it is deemed appropriate to start with certain areas, the Bill itself should make it clear to which areas it is intended to extend the provisions and should address the issue of providing proper parliamentary accountability in relation to all expenditure.
Perhaps the major speech was made by my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), who pointed out that at its heart the Bill is about the constitutional relationship between Parliament and Whitehall and that the proper process is for Departments to supply proper accounting to Parliament and for the Public Accounts Committee to scrutinise that accounting.
My right hon. Friend the Member for Haltemprice and Howden also pointed out that the Public Accounts Committee had not been consulted on the legislation and that it meddled with some sound aspects of the current procedures for parliamentary accountability, as well as locking in place some of its weaker aspects. He also appeared to offer, on behalf of the PAC, to take evidence from Treasury Ministers about their intent and to provide a method for scrutinising the proposed legislation. My right hon. Friend also made the important point that no EU problems were associated with extending the powers of the Auditor General and the NAO to cover all areas of Government expenditure.

Mr. Geraint Davies: Does the hon. Gentleman believe that it would be worth delaying resource accounting, and all its benefits, for years so that we could provide a broader remit for the Comptroller and Auditor General, or does he accept that it is better to move forward and consider later, bit by bit, the brief for the NAO?

Mr. Flight: With respect, that question has already been answered. The Opposition have offered the sensible proposal of a Special Standing Committee to address all the problems. The Bill as it stands would introduce resource accounting, but would cause more problems than it solved. That point has been made by almost every right hon. and hon. Member who contributed to the debate.
The hon. Member for Kingston and Surbiton (Mr. Davey) broadly supported the main themes, but seemed to suggest that individual Members of Parliament should have rights to propose spending increases. The right hon. Member for Swansea, West (Mr. Williams) best expressed the overall view of the House from his

considerable experience. He supported the argument of my right hon. Friend the Member for Haltemprice and Howden that there were no EU problems in limiting the powers of the NAO to all areas of Government expenditure.
The hon. Member for Workington (Mr. Campbell-Savours) pointed out that a key apprenticeship for anyone seeking Government office should be membership of the PAC. He also made the point that the NAO believes that the Bill threatens to weaken the independence of the Comptroller and Auditor General and his accountability to Parliament. My hon. Friend the Member for Macclesfield (Mr. Winterton) will, I hope, make constitutional history in proposing the Special Standing Committee and, importantly, proposing that the Financial Reporting Advisory Board, which is at present a creature of the Treasury, should be put on to an independent statutory basis.
My hon. Friend the Member for Salisbury (Mr. Key) illustrated how effective the Bill has been in meeting the objective of bypassing difficult areas, including some £22 billion of defence expenditure and problems caused by intellectual rights and sophisticated weaponry. The hon. Member for Brent, North (Mr. Gardiner) supported the proposal for a Special Standing Committee, and my hon. Friend the Member for Bexhill and Battle (Mr. Wardle) gave a valuable survey of the benefits and case for resource accounting, but stressed that it would be risky to proceed with the Bill without adequate consultation and dialogue with the PAC and the Auditor General.
My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) highlighted the fact that there is no valid reason for excluding NHS trusts, although there are sound arguments for excluding schools. The hon. Member for Broxtowe (Dr. Palmer) suggested that the power of the National Audit Office should be extended on a voluntary basis rather than on a statutory basis.
I conclude by repeating and stressing the bona fide commitment, given by my hon. Friend the Member for West Dorset, that the Conservative party will put in place an accounts commission to establish statements of national accounting practice for the public sector that will parallel those in the private sector. That commission, to be led by Sir Bryan Carsberg, will be implemented when the next Conservative Government are formed.
Finally, the Bill seems to smack of "Animal Farm". It is full of good intentions, but goes somewhere else. To misquote the novel, legs are good, but four legs are, apparently, bad.

The Economic Secretary to the Treasury (Miss Melanie Johnson): Resource accounting and budgeting is right and necessary. It is right because our focus should no longer simply be on how we spend the cash each year, but rather on what we get for our money. We should focus on outputs rather than on inputs, and on delivery of service rather than on process.
The private sector realised long ago that more comprehensive financial statements were necessary in the modern world. It is time for the Government to recognise that as well, and the reforms in the Bill are the backbone of our modernising agenda. However, resource accounting and budgeting goes further. Under the new system, there


will be a summary of resource outturns reflecting parliamentary control and, of critical importance, a statement of resources for the aims and objectives of Departments under their public service agreements. With resource accounting and budgeting, there will be only clear and unambiguously prudent planning and control of public expenditure.
I come now to the extent of parliamentary consultation and involvement in preparing the Bill. That matter has exercised a number of hon. Members—perhaps I should refer to them as hon. Gentlemen, as no hon. Lady has taken part in the debate. Parliament has been involved in the resource accounting and budgeting project from day one. The previous Administration published a Green Paper in July 1994 and a White Paper in 1995. Memorandums on the subject have been submitted to Parliament, and there have been parliamentary hearings and the subsequent publication of reports on resource accounting and budgeting by the Public Accounts Committee and by the Treasury Committee. The Procedure Committee has also covered the project, so it is clear that Parliament has played an important role throughout its development.
The debate has been worth while, and several hon. Members have noted that the Comptroller and Auditor General and the National Audit Office have been involved at all stages of the Bill's drafting process. They have seen all drafts and have been involved in the process since the earliest days.

Mr. David Davis: I accept that what the Economic Secretary says is accurate, but two points stand out. First, the memorandum given to the Public Accounts Committee in March differed significantly from the final Bill, as I pointed out in my speech. Secondly, the draft Bill was shown to the National Audit Office only three weeks before its publication date. That does not constitute full consultation.

Miss Johnson: I did not say that we had consulted as much as we should have liked. I said that the Public Accounts Committee and the National Audit Office had been involved.

Mr. Davis: indicated assent

Miss Johnson: The right hon. Gentleman agrees that it is not true that those bodies were not involved. I believe that the Government have already apologised for being unable to send a draft of the Bill to the Public Accounts Committee or to other relevant Select Committees. I repeat that apology, but a draft Bill was simply not available in time. I am sure that the right hon. Gentleman is aware of the problems that can arise in that connection. However, as I said, Treasury officials consulted closely with the NAO throughout the process. The Treasury has attempted to keep Committees informed of progress on policy development and the implementation of the resource accounting and budgeting project. It will continue to do so.

Mr. Letwin: If it was an unfortunate fact of life that, after two and half years of government and five years of implementation of the Labour programme, the

Government could not make the Bill available in time, will the Minister grant the House the Special Standing Committee that would relieve us of the need to divide?

Miss Johnson: I shall come to that matter much later.
We are committed to ensuring that reporting to Parliament will continue throughout the implementation phase. As the availability and relevance of information of interest to Parliament increases, memorandums will be submitted to Parliament to provide regular updates on policy and implementation.
Resource accounting and budgeting will significantly improve the outdated and outmoded system of cash-based accounting in two distinct ways. First, the full economic cost of Government activities will be capable of proper measurement by the inclusion of costs such as capital consumption that are not reflected in cash-based accounts. It will also match costs to the right time period, providing Government with a better basis for allocating resources. Secondly, there will be improvements in the treatment of capital spending. Instead of simply identifying the full cost in the year of acquisition, the cost of capital will be spread over its useful life.
The Government have introduced four trigger points, to which several hon. Members have referred. I can assure my hon. Friend the Member for Brent, North (Mr. Gardiner) that trigger point 2 has been successfully passed by all Departments. There is no problem about that. All Departments have moved on to trigger point 3, which involves the NAO in carrying out an audit of dry-run resource accounts from Departments for 1998–99. The final trigger point is scheduled for next summer, and Departments will make available to Select Committees dry-run, resource-based estimates for 2000–01 as soon as possible after the cash-based 2000–01 main estimates are produced.

Ms Sally Keeble: My hon. Friend may not be aware that the Agriculture Committee has already been taken through resource-based accounts. There was a great deal of discussion and explanation of them, and the only issue that arose was that some hon. Members, particularly from the Opposition Benches, did not turn up for that.

Miss Johnson: I am grateful for my hon. Friend's knowledge of what has been done on resource accounting and budgeting in the Agriculture Committee. It is disappointing, given the fuss that they have made, that Opposition Members were not present.
Following the trigger points, we aim that resource accounting and budgeting should lead to whole-of-Government accounts. These will fulfil the commitment given in the code for fiscal stability to produce accounts for the whole public sector, on a consolidated basis if possible. Audited whole-of-Government accounts will improve the information available to support the conduct and monitoring of fiscal policy. Those accounts will also improve accountability to Parliament and provide greater transparency for taxpayers.

Mr. Tyrie: Will the introduction of resource accounting have any effect on the calculations of the golden rule?

Miss Johnson: I should not imagine that it would.
To produce full, audited, whole-of-Government accounts, we will need greater conformity of accounting policies, systems and procedures. Those are major challenges. The Government have decided to adopt a staged approach in which we will first concentrate on delivering audited accounts that cover central Government Departments, agencies and non-departmental public bodies. A final decision to extend coverage to the whole public sector will be taken in due course when the outcomes of various possible developments in financial reporting and further development work is clearer. The purpose of the clauses relating to whole-of-Government accounts is to enable the Treasury to prepare as efficiently as possible by adopting relevant best practice consolidation procedures used in the private sector.
Several hon. Members have mentioned Partnerships UK. As well as covering resource accounting, the Bill puts in place the foundations for another strand of our drive to modernise our key public services—the creation of PUK. That new public-private partnership will operate in the private sector, but with a clear public mission. PUK will offer a long-term home to the type of deal-making skills that are currently temporarily available to the public sector through the Treasury task force. PUK will be instrumental in helping the public sector to address the key weaknesses in the current public-private sector partnership process. In that way, the public sector will become a more effective client. The bottom line is that PUK will help to deliver better value for money and more investment in front-line services.
Since the Government came to power just two and a half years ago, we have fundamentally reformed the PFI. We have prioritised projects, ended universal testing, offered a fairer deal to staff, and standardised contracts. We have put the PFI on a stable and modern footing. We now need to use the new PFI to drive forward our programme to modernise public services in sectors where it has not worked before; we need to develop new, more collaborative partnerships with the private sector as part of our wider public-private partnership programme.
PUK will allow the public sector to form partnerships with the private sector on equal terms. As a public-private partnership in the private sector, but operating in the interests of the public sector, PUK will be able to offer a longer-term home to the skill base required to support the public sector in the execution of public-private partnership deals. The business plan for PUK is now under development; we have been consulting widely throughout, so that PUK generates the greatest benefit for all the stakeholders in PFI—public sector and private sector alike.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) referred to the relationship between the Comptroller and Auditor General and the House. I can reassure him that the CAG will remain an Officer of the House of Commons. He will continue to have complete discretion to decide on his work, with the freedom to report exactly as he sees fit.
Several hon. Members, especially my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the right hon. Member for Haltemprice and Howden (Mr. Davis)—both of whom have given distinguished service as Chairmen of the Public Accounts Committee—my right hon. Friend the Member for Swansea, West (Mr. Williams) and my hon. Friend the Member for Workington, raised issues about National Audit Office

access. However, the Bill is not about public sector audit; it is intended to be about resource accounting—that is the fundamental point. The Government believe that it is right to focus on that important change without complicating matters.
Moreover, we are not aware that, in practice, there is a problem with NAO access in any regard. In each of the cases mentioned—contractors, non-departmental public bodies and public sector companies—the NAO has access by agreement. Indeed, hon. Members gave some examples of the NAO gaining access and doing extremely good work. I am not aware of any cases where the NAO has not been able to gain access.

Mr. Gardiner: I am grateful to my hon. Friend for giving way on that point, because she had left the Chamber when I commented on the investigation of the national lottery. Although the Government had allowed access, Camelot had refused access. The Government must address situations similar to that; I trust that they will do so in Committee.

Miss Johnson: I am grateful to my hon. Friend for making that point. I am aware of that issue; it is a legal one and is now close to resolution. I believe that the matter is being dealt with satisfactorily.

Dr. Palmer: I am grateful to my hon. Friend for giving way yet again. Does she agree that there will be widespread dismay—in accounting and in much wider circles—if the proposals are delayed due to those relatively minor points?

Miss Johnson: I am grateful to my hon. Friend for his remarks. There would be considerable anxiety.
Underpinning everything is a strong audit framework in the public sector, which is stronger than that in the private sector. The work of the Audit Commission in local government goes well beyond normal private sector audits. Therefore, I see no circumstances in which the Comptroller and Auditor General would need such access rights and could not rely on the work of other auditors. Indeed, the danger with such suggestions is that some organisations will be audited by two separate bodies, and we would need to be very careful about that. [Interruption.]

Mr. Deputy Speaker: Order. The Minister is addressing the House, so I plead with it to come to order. Private conversations should be held outside the Chamber.

Miss Johnson: Thank you, Mr. Deputy Speaker.
The hon. Member for West Dorset (Mr. Letwin) mentioned the Treasury discretion. The Treasury discretion to set up accounting rules is very far from unfettered. In fact, it will be more circumscribed under the proposed system than it is under the present system. Conservative Members have deliberately avoided that fact. We have tightened up the requirements under which the Treasury and everyone else will operate as a result of the Bill and the requirement to follow the generally accepted accounting practice—GAAP—and the discipline provided by the independent Financial Reporting Advisory Board means that the Treasury discretion to set accounting rules will be very limited under these proposals.
Several hon. Members referred to what the Bill will cover. It will deliver everything that they say they would like to achieve. Resource accounts will follow generally accepted accounting practice, but they will introduce the best accounting practice to the Government's own accounts. That means that, in the fullness of time when the whole-of-Government accounts are introduced, the points made by the hon. Member for Salisbury (Mr. Key) will be covered. It is wrong to think that anything will be left outside those arrangements.

Mr. Letwin: I am sorry to trouble the hon. Lady again, but does she really maintain that schools, hospitals and the great preponderance of roads in this country will not be left out?

Miss Johnson: They will not be left out when the whole-of-Government accounts system is introduced.

Mr. Letwin: When will that be?

Miss Johnson: It will be as progress is made on the other things. [Interruption.] Conservative Members may laugh, but I have the previous Government's White Paper entitled "Better Accounting for the Taxpayer's Money". It says:
the Government will wish to concentrate in the first instance on successful implementation at a departmental level.
Whole-of-Government accounts will follow. We are doing nothing more than the previous Government recommended in the first place.
Several hon. Members mentioned the money voted by Parliament and the scrutiny of all expenditure. All the money voted by Parliament will pass through a Department's book and can be audited by the Comptroller and Auditor General for accuracy, regularity and propriety. When the money is ultimately spent by another public sector body, it will be audited by the Comptroller and Auditor General, another public sector auditor or possibly by one of its contractors. The Public Audit Forum is playing an increasingly important role in ensuring that all public bodies are audited to the same standards and under the same procedures.

Mr. Rendel: The Economic Secretary keeps telling us that the Comptroller and Auditor General has all the powers that he needs, but does she accept that he does not believe that he has them?

Miss Johnson: People have identified an issue that relates to the powers of the Comptroller and Auditor General and the National Audit Office. The fact is that the Bill does not concern those powers or access by the NAO to Government accounts. It concerns resource accounting and budgeting and there are many advantages to that.

Several hon. Members: rose—

Miss Johnson: I must make progress, or I will not have the opportunity to deal with points raised by one or two other hon. Members.
The hon. Member for Macclesfield (Mr. Winterton) referred to the audit of departmental resource accounts. That is in progress, and as my right hon. Friend the Chief Secretary said in his opening speech, the next memorandum to Parliament will report on progress and will include any Departments that have not passed trigger point 3. All that information will be forthcoming.
I come now to the advantages of the Bill and the hon. Member for Macclesfield's suggestion that there should be a Special Standing Committee. There has been a lot of synthetic fuss by Opposition Front-Bench Members. It is staggering that the shadow Chief Secretary has only recently arrived in the Chamber. It is remarkable that the Opposition amendment does not mention audit at all, despite the fact that the amendment was, no doubt, tabled after due consideration by the Opposition. Members of the Public Accounts Committee have, justifiably, been pursuing issues of concern to them, but I do not believe that Opposition Front-Bench Members are doing anything other than latching on to a respectable suggestion being made by those who have a respectable reason to make it.
As my right hon. Friend the Chief Secretary has said, we have listened very carefully. We have listened to the reasoned points made by right hon. and hon. Members who have spoken in the debate, but we will not give way to the suggestion that there should be a Special Standing Committee. It is right to pursue the matter, and hon. Members have two vehicles for doing so. First, the Public Accounts Committee will do whatever it wants to do, and Ministers would be very wary of suggesting anything different.

Mr. Nicholas Winterton: Will the hon. Lady give way?

Miss Johnson: No, I regret that because time is short I will not give way.
Secondly, the Standing Committee will discuss the matter. I understand that no suggestion for a Special Standing Committee has been made through the usual channels.

Mr. Winterton: I have to say to the Economic Secretary that as the Chairman of the Procedure Committee, which is a Committee of this House, I am not answerable to the Opposition Front Bench, just as I am not answerable to the Government Front Bench. This is a proposal made by a House Committee to the Government because they failed to honour a commitment that they gave earlier in respect of the Bill.

Miss Johnson: The hon. Gentleman knows full well that there is a difference between the line that Opposition Front-Bench Members are pushing and the respectable suggestion that he has made, albeit during the debate, without thought beforehand and without going through the usual channels.
I shall now summarise the important aspects of the Bill. It is a very important Bill. It is one of the biggest ever reforms of the management of our country's public services, and I commend it to the House. It is a major milestone; it modernises the public sector and makes sure that we will make better use of the private sector. One of the real revolutions, as the right hon. Member for Haltemprice and Howden pointed out, is the possibility


that much more meaningful management information will be available to the public sector and, indeed, to Members of the House who scrutinise these matters.
The accountability and transparency that will be provided through resource accounting and budgeting are substantial improvements on the existing arrangements. The Bill had solid bipartisan support when it originated and again in the debate today. I hope that the fact that we have said that we are open to dialogue means that the support will continue into the Standing Committee.

Question put, That the amendment be made:—

The House divided: Ayes 140, Noes 327.

Division No. 8]
[9.59 pm


AYES


Ainsworth, Peter (E Surrey)
Hayes, John


Amess, David
Heathcoat-Amory, Rt Hon David


Ancram, Rt Hon Michael
Horam, John


Arbuthnot, Rt Hon James
Howard, Rt Hon Michael


Baldry, Tony
Howarth, Gerald (Aldershot)


Bercow, John
Hunter, Andrew


Beresford, Sir Paul
Jack, Rt Hon Michael


Blunt, Crispin
Jackson, Robert (Wantage)


Body, Sir Richard
Jenkin, Bernard


Boswell, Tim
Key, Robert


Bottomley, Peter (Worthing W)
King, Rt Hon Tom (Bridgwater)


Bottomley, Rt Hon Mrs Virginia
Kirkbride, Miss Julie


Brady, Graham
Laing, Mrs Eleanor


Brazier, Julian
Lait, Mrs Jacqui


Brooke, Rt Hon Peter
Lansley, Andrew


Browning, Mrs Angela
Leigh, Edward


Bruce, Ian (S Dorset)
Letwin, Oliver


Burns, Simon
Lewis, Dr Julian (New Forest E)


Cash, William
Lidington, David


Chapman, Sir Sydney (Chipping Barnet)
Lilley, Rt Hon Peter



Lloyd, Rt Hon Sir Peter (Fareham)


Chope, Christopher
Loughton, Tim


Clappison, James
Luff, Peter


Clark, Dr Michael (Rayleigh)
Lyell, Rt Hon Sir Nicholas


Clarke, Rt Hon Kenneth (Rushcliffe)
MacGregor, Rt Hon John



McIntosh, Miss Anne


Collins, Tim
MacKay, Rt Hon Andrew


Colvin, Michael
Maclean, Rt Hon David


Cormack, Sir Patrick
McLoughlin, Patrick


Cran, James
Madel, Sir David



Davies, Quentin (Grantham)
Malins, Humfrey


Day, Stephen
Mates, Michael


Dorrell, Rt Hon Stephen
Maude, Rt Hon Francis


Duncan Smith, Iain
Mawhinney, Rt Hon Sir Brian


Emery, Rt Hon Sir Peter
May, Mrs Theresa


Evans, Nigel
Moss, Malcolm


Faber, David
Nicholls, Patrick


Fabricant, Michael
O'Brien, Stephen (Eddisbury)


Fallon, Michael
Ottaway, Richard


Flight, Howard
Page, Richard


Forth, Rt Hon Eric
Paice, James


Fowler, Rt Hon Sir Norman
Paterson, Owen


Fox, Dr Liam
Pickles, Eric


Fraser, Christopher
Portillo, Rt Hon Michael


Gale, Roger
Prior, David


Garnier, Edward
Randall, John


Gibb, Nick
Robertson, Laurence


Gill, Christopher
Roe, Mrs Marion (Broxbourne)


Gillan, Mrs Cheryl
Ruffley, David


Gorman, Mrs Teresa
St Aubyn, Nick


Gray, James
Sayeed, Jonathan


Green, Damian
Shephard, Rt Hon Mrs Gillian


Grieve, Dominic
Shepherd, Richard


Gummer, Rt Hon John
Simpson, Keith (Mid-Norfolk)


Hamilton, Rt Hon Sir Archie
Soames, Nicholas


Hammond, Philip
Spelman, Mrs Caroline


Hawkins, Nick
Spicer, Sir Michael





Spring, Richard
Waterson, Nigel


Stanley, Rt Hon Sir John
Whitney, Sir Raymond


Steen, Anthony
Whittingdale, John


Streeter, Gary
Widdecombe, Rt Hon Miss Ann


Swayne, Desmond
Wilkinson, John


Syms, Robert
Willetts, David


Tapsell, Sir Peter
Wilshire, David


Taylor, John M (Solihull)
Winterton, Mrs Ann (Congleton)


Taylor, Sir Teddy
Winterton, Nicholas (Macclesfield)


Townend, John
Woodward, Shaun


Tredinnick, David
Yeo, Tim


Trend, Michael
Young, Rt Hon Sir George


Tyrie, Andrew



Viggers, Peter
Tellers for the Ayes:


Walter, Robert
Mr. Oliver Heald and


Wardle, Charles
Mr. Peter Atkinson.


NOES


Abbott, Ms Diane
Clelland, David


Ainger, Nick
Coaker, Vernon


Ainsworth, Robert (Cov'try NE)
Coffey, Ms Ann


Alexander, Douglas
Cohen, Harry


Allan, Richard
Coleman, Iain


Allen, Graham
Colman, Tony


Anderson, Donald (Swansea E)
Cook, Frank (Stockton N)


Anderson, Janet (Rossendale)
Cooper, Yvette


Armstrong, Rt Hon Ms Hilary
Corbett, Robin


Ashton, Joe
Corbyn, Jeremy


Atherton, Ms Candy
Cotter, Brian


Atkins, Charlotte
Cousins, Jim


Austin, John
Cox, Tom


Barnes, Harry
Crausby, David


Barron, Kevin
Cryer, Mrs Ann (Keighley)


Battle, John
Cryer, John (Hornchurch)


Bayley, Hugh
Cummings, John


Beckett, Rt Hon Mrs Margaret
Cunliffe, Lawrence


Beith, Rt Hon A J
Cunningham, Rt Hon Dr Jack (Copeland)


Bell, Martin (Tatton)



Bell, Stuart (Middlesbrough)
Cunningham, Jim (Cov'try S)


Benn, Hilary (Leeds C)
Curtis-Thomas, Mrs Claire


Benn, Rt Hon Tony (Chesterfield)
Darling, Rt Hon Alistair



Bennett, Andrew F
Darvill, Keith


Bermingham, Gerald
Davey, Edward (Kingston)


Betts, Clive
Davey, Valerie (Bristol W)


Blears, Ms Hazel
Davies, Rt Hon Denzil (Llanelli)


Blizzard, Bob
Davies, Geraint (Croydon C)


Blunkett, Rt Hon David
Dawson, Hilton


Boateng, Rt Hon Paul
Dean, Mrs Janet


Bradley, Keith (Withington)
Dismore, Andrew


Bradley, Peter (The Wrekin)
Donohoe, Brian H


Brown, Rt Hon Nick (Newcastle E)
Doran, Frank


Brown, Russell (Dumfries)
Dowd, Jim


Browne, Desmond
Drew, David


Burden, Richard
Dunwoody, Mrs Gwyneth


Burgon, Colin
Eagle, Angela (Wallasey)


Butler, Mrs Christine
Eagle, Maria (L'pool Garston)


Campbell, Alan (Tynemouth)
Efford, Clive


Campbell, Ronnie (Blyth V)
Ennis, Jeff


Campbell-Savours, Dale
Etherington, Bill


Cann, Jamie
Fearn, Ronnie


Caplin, Ivor
Fisher, Mark



Casale, Roger
Fitzpatrick, Jim


Caton, Martin
Fitzsimons, Lorna


Cawsey, Ian
Flint, Caroline


Chapman, Ben (Wirral S)
Flynn, Paul


Chaytor, David
Foster, Rt Hon Derek


Chidgey, David
Foster, Michael J (Worcester)


Clapham, Michael
Fyfe, Maria


Clark, Rt Hon Dr David (S Shields)
Gardiner, Barry


Clark, Dr Lynda (Edinburgh Pentlands)
George, Bruce (Walsall S)



Gerrard, Neil


Clark, Paul (Gillingham)
Gibson, Dr Ian


Clarke, Charles (Norwich S)
Gilroy, Mrs Linda


Clarke, Eric (Midlothian)
Godman, Dr Norman A


Clarke, Rt Hon Tom (Coatbridge)
Godsiff, Roger


Clarke, Tony (Northampton S)
Goggins, Paul






Golding, Mrs Llin
Marsden, Gordon (Blackpool S)


Gordon, Mrs Eileen
Marsden, Paul (Shrewsbury)


Griffiths, Jane (Reading E)
Marshall, David (Shettleston)


Griffiths, Nigel (Edinburgh S)
Marshall-Andrews, Robert


Griffiths, Win (Bridgend)
Martlew, Eric


Grogan, John
Maxton, John


Hain, Peter
Meacher, Rt Hon Michael


Hall, Patrick (Bedford)
Meale, Alan


Hamilton, Fabian (Leeds NE)
Michie, Bill (Shef'ld Heeley)


Hanson, David
Milburn, Rt Hon Alan


Harman, Rt Hon Ms Harriet
Miller, Andrew


Heal, Mrs Sylvia
Mitchell, Austin


Healey, John
Moonie, Dr Lewis


Heath, David (Somerton & Frome)
Moran, Ms Margaret


Henderson, Doug (Newcastle N)
Morgan, Alasdair (Galloway)


Henderson, Ivan (Harwich)
Morley, Elliot


Hepburn, Stephen
Morris, Rt Hon Ms Estelle (B'ham Yardley)


Heppell, John



Hesford, Stephen
Mountford, Kali


Hill, Keith
Mudie, George



Hinchliffe, David
Mullin, Chris


Hoon, Rt Hon Geoffrey
Murphy, Denis (Wansbeck)


Hope, Phil
Norris, Dan


Hopkins, Kelvin
Oaten, Mark



Hoyle, Lindsay
O'Brien, Bill (Normanton)


Hughes, Ms Beverley (Stretford)
O'Brien, Mike (N Warks)


Hughes, Simon (Southwark N)
O'Hara, Eddie


Humble, Mrs Joan
Olner, Bill


Hurst, Alan
O'Neill, Martin


Hutton, John
Osborne, Ms Sandra


Iddon, Dr Brian
Palmer, Dr Nick


Illsley, Eric
Pearson, Ian


Jackson, Helen (Hillsborough)
Perham, Ms Linda


Jenkins, Brian
Pickthall, Colin


Johnson, Alan (Hull W & Hessle)
Pike, Peter L


Johnson, Miss Melanie (Welwyn Hatfield)
Plaskitt, James



Pollard, Kerry


Jones, Rt Hon Barry (Alyn)
Pond, Chris


Jones, Helen (Warrington N)
Pope, Greg


Jones, Jon Owen (Cardiff C)
Pound, Stephen


Kaufman, Rt Hon Gerald
Powell, Sir Raymond


Keeble, Ms Sally
Prentice, Ms Bridget (Lewisham E)


Keen, Alan (Feltham & Heston)
Prentice, Gordon (Pendle)


Kelly, Ms Ruth
Primarolo, Dawn


Kemp, Fraser
Prosser, Gwyn


Kennedy, Jane (Wavertree)
Purchase, Ken


Kidney, David
Quin, Rt Hon Ms Joyce


Kilfoyle, Peter
Quinn, Lawrie


Kirkwood, Archy
Radice, Rt Hon Giles


Kumar, Dr Ashok
Rammell, Bill


Ladyman, Dr Stephen
Rapson, Syd


Lawrence, Mrs Jackie
Raynsford, Nick


Laxton, Bob
Reed, Andrew (Loughborough)


Leslie, Christopher
Reid, Rt Hon Dr John (Hamilton N)


Levitt, Tom
Rendel, David


Linton, Martin
Roche, Mrs Barbara


Livsey, Richard
Rogers, Allan


Lloyd, Tony (Manchester C)
Rooker, Rt Hon Jeff


Love, Andrew
Rooney, Terry


McAvoy, Thomas
Ross, Ernie (Dundee W)


McCafferty, Ms Chris
Rowlands, Ted


McCartney, Rt Hon Ian (Makerfield)
Roy, Frank



Ruddock, Joan


McDonagh, Siobhain
Russell, Bob (Colchester)


Macdonald, Calum
Ryan, Ms Joan


McDonnell, John
Salter, Martin


McGuire, Mrs Anne
Sanders, Adrian


McIsaac, Shona
Sarwar, Mohammad


McKenna, Mrs Rosemary
Savidge, Malcolm


Mackinlay, Andrew
Sawford, Phil


McNamara, Kevin
Sedgemore, Brian


McNulty, Tony
Shaw, Jonathan


Mactaggart, Fiona
Sheerman, Barry


McWilliam, John
Sheldon, Rt Hon Robert


Mahon, Mrs Alice
Simpson, Alan (Nottingham S)


Mallaber, Judy
Smith, Rt Hon Andrew (Oxford E)





Smith, Angela (Basildon)
Turner, Dennis (Wolverh'ton SE)


Smith, Rt Hon Chris (Islington S)
Turner, Dr Desmond (Kemptown)


Smith, Miss Geraldine (Morecambe & Lunesdale)
Turner, Dr George (NW Norfolk)



Turner, Neil (Wigan)


Smith, Jacqui (Redditch)
Twigg, Derek (Halton)


Smith, John (Glamorgan)
Twigg, Stephen (Enfield)


Smith, Llew (Blaenau Gwent)
Tyler, Paul


Smith, Sir Robert (W Ab'd'ns)
Tynan, Bill


Snape, Peter
Vis, Dr Rudi


Soley, Clive
Walley, Ms Joan


Spellar, John
Ward, Ms Claire


Squire, Ms Rachel
Wareing, Robert N


Starkey, Dr Phyllis
Watts, David


Steinberg, Gerry
White, Brian


Stevenson, George
Whitehead, Dr Alan


Stewart, David (Inverness E)
Wicks, Malcolm


Stewart, Ian (Eccles)
Williams, Rt Hon Alan (Swansea W)


Stinchcombe, Paul



Stoate, Dr Howard
Williams, Alan W (E Carmarthen)


Stringer, Graham
Willis, Phil


Taylor, Rt Hon Mrs Ann (Dewsbury)
Wills, Michael



Wilson, Brian


Taylor, Ms Dari (Stockton S)
Winnick, David


Taylor, David (NW Leics)
Winterton, Ms Rosie (Doncaster C)


Taylor, Matthew (Truro)
Wise, Audrey


Temple-Morris, Peter
Wood, Mike


Thomas, Gareth (Clwyd W)
Woolas, Phil


Thomas, Gareth R (Harrow W)
Wray, James


Timms, Stephen
Wright, Anthony D (Gt Yarmouth)


Tipping, Paddy
Wright, Dr Tony (Cannock)


Todd, Mark
Wyatt, Derek


Tonge, Dr Jenny



Touhig, Don
Tellers for the Noes:


Trickett, Jon
Mr. Kevin Hughes and


Truswell, Paul
Mr. Mike Hall.

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading), and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

Orders of the Day — GOVERNMENT RESOURCES AND ACCOUNTS BILL [MONEY]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Government Resources and Accounts Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any expenditure incurred by the Treasury under the Act;
(2) refunds of money paid into the Consolidated Fund as the result of an error;
(3) the charging on and payment out of the Consolidated Fund of sums required for fulfilling guarantees given by the Treasury;
(4) any increase attributable to the Act in the sums payable out of money provided by Parliament under any other Act; and
(5) the payment of sums into the Consolidated Fund. —[Mr. Touhig.]

The House proceeded to a Division.

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. May I instruct the Serjeant at Arms that I have heard a complaint that no Division bells are ringing? Could that be looked into?

The House having divided: Ayes 318, Noes 3.

Division No. 9]
[10.16 pm


AYES


Abbott, Ms Diane (Copeland)
Cunningham, Rt Hon Dr Jack


Ainger, Nick



Ainsworth, Robert (Cov'try NE)
Cunningham, Jim (Cov'try S)



Alexander, Douglas
Curtis—Thomas, Mrs Claire


Allan, Richard
Darling, Rt Hon Alistair


Allen, Graham
Darvill, Keith


Anderson, Donald (Swansea E)
Davey, Edward (Kingston)


Anderson, Janet (Rossendale)
Davey, Valerie (Bristol W)


Armstrong, Rt Hon Ms Hilary
Davies, Rt Hon Denzil (Llanelli)


Ashton, Joe
Davies, Geraint (Croydon C)


Atherton, Ms Candy
Dawson, Hilton


Austin, John
Dean, Mrs Janet


Barnes, Harry
Dismore, Andrew


Barron, Kevin
Donohoe, Brian H


Battle, John
Doran, Frank


Bayley, Hugh
Dowd, Jim


Beckett, Rt Hon Mrs Margaret
Drew, David


Beith, Rt Hon A J
Dunwoody, Mrs Gwyneth


Bell, Martin (Tatton)
Eagle, Angela (Wallasey)


Benn, Hilary (Leeds C)
Eagle, Maria (L'pool Garston)


Benn, Rt Hon Tony (Chesterfield)
Efford, Clive


Bennett, Andrew F
Ennis, Jeff


Bermingham, Gerald
Etherington, Bill


Betts, Clive
Fearn, Ronnie


Blears, Ms Hazel
Fisher, Mark


Blizzard, Bob
Fitzpatrick, Jim


Boateng, Rt Hon Paul
Fitzsimons, Loma


Bradley, Keith (Withington)
Flint, Caroline


Bradley, Peter (The Wrekin)
Flynn, Paul


Brinton, Mrs Helen
Foster, Rt Hon Derek


Brown, Rt Hon Nick (Newcastle E)
Foster, Michael J (Worcester)


Brown, Russell (Dumfries)
Fyfe, Maria


Browne, Desmond
Gardiner, Barry


Burden, Richard
George, Bruce (Walsall S)


Burgon, Colin
Gerrard, Neil


Butler, Mrs Christine
Gibson, Dr Ian


Campbell, Alan (Tynemouth)
Gilroy, Mrs Linda


Campbell, Ronnie (Blyth V)
Godman, Dr Norman A


Campbell—Savours, Dale
Godsiff, Roger


Cann, Jamie
Goggins, Paul


Caplin, Ivor
Golding, Mrs Llin


Casale, Roger
Gordon, Mrs Eileen


Caton, Martin
Griffiths, Jane (Reading E)


Cawsey, Ian
Griffiths, Nigel (Edinburgh S)


Chapman, Ben (Wirral S)
Griffiths, Win (Bridgend)


Chaytor, David
Grogan, John


Chidgey, David
Hain, Peter


Clapham, Michael
Hall, Patrick (Bedford)


Clark, Rt Hon Dr David (S Shields)
Hamilton, Fabian (Leeds NE)


Clark, Dr Lynda (Edinburgh Pentlands)
Hanson, David



Harman, Rt Hon Ms Harriet


Clark, Paul (Gillingham)
Heal, Mrs Sylvia


Clarke, Charles (Norwich S)
Healey, John


Clarke, Eric (Midlothian)
Heath, David (Somerton & Frome)


Clarke, Rt Hon Tom (Coatbridge)
Henderson, Doug (Newcastle N)


Clarke, Tony (Northampton S)
Henderson, Ivan (Harwich)


Clelland, David
Hepburn, Stephen


Coaker, Vernon
Heppell, John


Coffey, Ms Ann
Hesford, Stephen



Cohen, Harry
Hill, Keith


Coleman, Iain
Hinchliffe, David


Colman, Tony
Hoon, Rt Hon Geoffrey


Cook, Frank (Stockton N)
Hope, Phil


Corbett, Robin
Hopkins, Kelvin


Corbyn, Jeremy
Hoyle, Lindsay


Cotter, Brian
Hughes, Ms Beverley (Stretford)


Cousins, Jim
Hughes, Simon (Southwark N)


Cox, Tom
Humble, Mrs Joan


Crausby, David
Hurst, Alan


Cryer, Mrs Ann (Keighley)
Hutton, John


Cryer, John (Hornchurch)
Iddon, Dr Brian


Cummings, John
Illsley, Eric


Cunliffe, Lawrence
Jackson, Helen (Hillsborough)





Jenkins, Brian
Pickthall, Colin


Johnson, Alan (Hull W & Hessle)
Pike, Peter L


Johnson, Miss Melanie (Welwyn Hatfield)
Plaskitt, James



Pollard, Kerry


Jones, Rt Hon Barry (Alyn)
Pond, Chris


Jones, Helen (Warrington N)
Pope, Greg


Jones, Jon Owen (Cardiff C)
Pound, Stephen


Kaufman, Rt Hon Gerald
Powell, Sir Raymond


Keeble, Ms Sally
Prentice, Ms Bridget (Lewisham E)


Keen, Alan (Feltham & Heston)
Prentice, Gordon (Pendle)


Kelly, Ms Ruth
Primarolo, Dawn


Kemp, Fraser
Prosser, Gwyn


Kennedy, Jane (Wavertree)
Purchase, Ken


Kidney, David
Quin, Rt Hon Ms Joyce


Kilfoyle, Peter
Quinn, Lawrie


Kirkwood, Archy
Radice, Rt Hon Giles


Kumar, Dr Ashok
Rammell, Bill



Ladyman, Dr Stephen
Rapson, Syd


Lawrence, Mrs Jackie
Raynsford, Nick


Laxton, Bob
Reed, Andrew (Loughborough)


Leslie, Christopher
Reid, Rt Hon Dr John (Hamilton N)


Levitt, Tom
Rendel, David


Linton, Martin
Roche, Mrs Barbara


Livsey, Richard
Rogers, Allan


Lloyd, Tony (Manchester C)
Rooker, Rt Hon Jeff


Love, Andrew
Rooney, Terry


McAvoy, Thomas
Ross, Ernie (Dundee W)


McCartney, Rt Hon Ian (Makerfield)
Rowlands, Ted



Roy, Frank


McDonagh, Siobhain
Ruddock, Joan


Macdonald, Calum
Russell, Bob (Colchester)


McDonnell, John
Ryan, Ms Joan


McGuire, Mrs Anne
Salter, Martin


McIsaac, Shona
Sarwar, Mohammad


McKenna, Mrs Rosemary
Savidge, Malcolm


Mackinlay, Andrew
Sawford, Phil


McNamara, Kevin
Sedgemore, Brian


McNulty, Tony
Shaw, Jonathan


Mactaggart, Fiona
Sheerman, Barry


McWilliam, John
Simpson, Alan (Nottingham S)


Mahon, Mrs Alice
Smith, Rt Hon Andrew (Oxford E)


Mallaber, Judy
Smith, Angela (Basildon)



Marsden, Gordon (Blackpool S)
Smith, Rt Hon Chris (Islington S)


Marsden, Paul (Shrewsbury)
Smith, Miss Geraldine (Morecambe & Lunesdale)


Marshall, David (Shettleston)



Marshall—Andrews, Robert
Smith, Jacqui (Redditch)


Martlew, Eric
Smith, John (Glamorgan)


Maxton, John
Smith, Llew (Blaenau Gwent)


Meacher, Rt Hon Michael
Smith, Sir Robert (W Ab'd'ns)


Meale, Alan
Snape, Peter


Michie, Bill (Shef'ld Heeley)
Soley, Clive


Milburn, Rt Hon Alan
Spellar, John


Miller, Andrew
Squire, Ms Rachel


Mitchell, Austin
Starkey, Dr Phyllis


Moonie, Dr Lewis
Steinberg, Gerry


Moran, Ms Margaret
Stevenson, George


Morgan, Alasdair (Galloway)
Stewart, David (Inverness E)


Morley, Elliot
Stewart, Ian (Eccles)


Morris, Rt Hon Ms Estelle (B'ham Yardley)
Stinchcombe, Paul



Stringer, Graham


Mountford, Kali
Taylor, Rt Hon Mrs Ann (Dewsbury)


Mudie, George



Mullin, Chris
Taylor, Ms Dari (Stockton S)


Murphy, Denis (Wansbeck)
Taylor, David (NW Leics)


Norris, Dan
Taylor, Matthew (Truro)


Oaten, Mark
Temple-Morris, Peter


O'Brien, Bill (Normanton)
Thomas, Gareth (Clwyd W)


O'Brien, Mike (N Warks)
Thomas, Gareth R (Harrow W)


O'Hara, Eddie
Timms, Stephen


Olner, Bill
Tipping, Paddy


O'Neill, Martin
Todd, Mark


Osborne, Ms Sandra
Touhig, Don


Palmer, Dr Nick
Trickett, Jon


Pearson, Ian
Truswell, Paul


Pendry, Tom
Turner, Dennis (Wolverh'ton SE)


Perham, Ms Linda
Turner, Dr Desmond (Kemptown)






Turner, Dr George (NW Norfolk)
Willis, Phil


Turner, Neil (Wigan)
Wills, Michael


Twigg, Derek (Halton)
Wilson, Brian


Twigg, Stephen (Enfield)
Winnick, David


Tyler, Paul
Winterton, Ms Rosie (Doncaster C)


Tynan, Bill
Wise, Audrey


Vis, Dr Rudi
Wood, Mike


Walley, Ms Joan
Woolas, Phil


Ward, Ms Claire
Wray, James


Wareing, Robert N
Wright, Anthony D (Gt Yarmouth)


Watts, David
Wright, Dr Tony (Cannock)


Whitehead, Dr Alan
Wyatt, Derek


Wicks, Malcolm



Williams, Rt Hon Alan (Swansea W)
Tellers for the Ayes:



Mr. Mike Hall and


Williams, Alan W (E Carmarthen)
Mr. Kevin Hughes.


NOES


Forth, Rt Hon Eric
Tellers for the Noes:


Gill, Christopher
Mr. David Wilshire and


Leigh, Edward
Mr. James Gray.

Question accordingly agreed to.

Orders of the Day — DELEGATED LEGISLATION

Mr. Deputy Speaker (Mr. Michael J. Martin): With the permission of the House, I shall take motions 3 and 4 together.

Mr. Eric Forth: No.

Mr. Deputy Speaker: In that case, I shall take them separately.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

AGRICULTURE

That the draft Pesticides (Maximum Residue Levels in Crops, Food and Feeding Stuffs) (England and Wales) Regulations 2000, which were laid before this House on 17th November, be approved.—[Mr. Touhig.]

The House divided: Ayes 304, Noes 2.

Division No. 10]
[10.29 pm


AYES


Ainger, Nick
Bermingham, Gerald


Ainsworth, Robert (Cov'try NE)
Betts, Clive


Alexander, Douglas
Blears, Ms Hazel


Allan, Richard
Blizzard, Bob


Allen, Graham
Boateng, Rt Hon Paul


Anderson, Donald (Swansea E)
Bradley, Keith (Withington)


Anderson, Janet (Rossendale)
Bradley, Peter (The Wrekin)


Armstrong, Rt Hon Ms Hilary
Brinton, Mrs Helen


Ashton, Joe
Brown, Russell (Dumfries)


Atherton, Ms Candy

Browne, Desmond


Atkins, Charlotte
Burden, Richard


Austin, John
Burgon, Colin


Barnes, Harry
Butler, Mrs Christine


Barron, Kevin
Campbell, Alan (Tynemouth)


Battle, John
Campbell, Ronnie (Blyth V)


Bayley, Hugh
Campbell—Savours, Dale


Beckett, Rt Hon Mrs Margaret
Cann, Jamie


Beith, Rt Hon A J
Caplin, Ivor


Bell, Martin (Tatton)
Casale, Roger


Benn, Hilary (Leeds C)
Caton, Martin


Benn, Rt Hon Tony (Chesterfield)
Cawsey, Ian


Bennett, Andrew F
Chapman, Ben (Wirral S)





Chaytor, David
Heppell, John


Clapham, Michael
Hesford, Stephen


Clark, Rt Hon Dr David (S Shields)
Hill, Keith


Clark, Dr Lynda (Edinburgh Pentlands)
Hinchliffe, David



Hoon, Rt Hon Geoffrey


Clark, Paul (Gillingham)
Hope, Phil


Clarke, Charles (Norwich S)
Hopkins, Kelvin


Clarke, Eric (Midlothian)
Hoyle, Lindsay


Clarke, Rt Hon Tom (Coatbridge)
Hughes, Ms Beverley (Stretford)


Clarke, Tony (Northampton S)
Hughes, Simon (Southwark N)


Clelland, David
Humble, Mrs Joan


Coaker, Vernon
Hurst, Alan


Coffey, Ms Ann
Hutton, John


Cohen, Harry
Iddon, Dr Brian


Coleman, Iain
Illsley, Eric


Colman, Tony
Jackson, Helen (Hillsborough)


Cook, Frank (Stockton N)
Jenkins, Brian


Corbett, Robin
Johnson, Alan (Hull W & Hessle)


Cotter, Brian
Johnson, Miss Melanie (Welwyn Hatfield)


Cousins, Jim



Cox, Tom
Jones, Rt Hon Barry (Alyn)


Crausby, David
Jones, Helen (Warrington N)


Cryer, Mrs Ann (Keighley)
Jones, Jon Owen (Cardiff C)


Cryer, John (Hornchurch)
Kaufman, Rt Hon Gerald


Cummings, John
Keeble, Ms Sally


Cunliffe, Lawrence
Keen, Alan (Feltham & Heston)


Cunningham, Jim (Cov'try S)
Kelly, Ms Ruth


Curtis-Thomas, Mrs Claire
Kemp, Fraser


Darling, Rt Hon Alistair
Kennedy, Jane (Wavertree)


Darvill, Keith
Kidney, David


Davey, Edward (Kingston)
Kilfoyle, Peter


Davey, Valerie (Bristol W)
Kirkwood, Archy


Davies, Geraint (Croydon C)
Kumar, Dr Ashok


Dawson, Hilton
Ladyman, Dr Stephen


Dean, Mrs Janet
Lawrence, Mrs Jackie


Dismore, Andrew
Laxton, Bob


Donohoe, Brian H
Leslie, Christopher


Doran, Frank
Levitt, Tom


Dowd, Jim
Linton, Martin


Drew, David
Livsey, Richard


Eagle, Angela (Wallasey)
Lloyd, Tony (Manchester C)


Eagle, Maria (L'pool Garston)
Love, Andrew


Efford, Clive
McAvoy, Thomas


Ennis, Jeff
McCartney, Rt Hon Ian (Makerfield)


Etherington, Bill



Fisher, Mark
McDonagh, Siobhain


Fitzpatrick, Jim
Macdonald, Calum


Fitzsimons, Lorna
McDonnell, John


Flint, Caroline
McGuire, Mrs Anne


Flynn, Paul
McIsaac, Shona


Foster, Rt Hon Derek
McKenna, Mrs Rosemary


Foster, Michael J (Worcester)
Mackinlay, Andrew


Fyfe, Maria
McNamara, Kevin


Gardiner, Barry
McNulty, Tony


George, Bruce (Walsall S)
Mactaggart, Fiona


Gerrard, Neil
McWilliam, John


Gibson, Dr Ian
Mahon, Mrs Alice


Gilroy, Mrs Linda
Mallaber, Judy


Godman, Dr Norman A
Marsden, Gordon (Blackpool S)


Goggins, Paul
Marsden, Paul (Shrewsbury)


Golding, Mrs Llin
Marshall, David (Shettleston)


Gordon, Mrs Eileen
Marshall-Andrews, Robert


Griffiths, Jane (Reading E)
Martlew, Eric


Griffiths, Nigel (Edinburgh S)
Maxton, John


Griffiths, Win (Bridgend)
Meacher, Rt Hon Michael


Grogan, John
Meale, Alan


Hall, Patrick (Bedford)
Michie, Bill (Shef'ld Heeley)


Hamilton, Fabian (Leeds NE)
Milburn, Rt Hon Alan


Hanson, David
Miller, Andrew


Harman, Rt Hon Ms Harriet
Mitchell, Austin


Heal, Mrs Sylvia
Moonie, Dr Lewis


Healey, John
Moran, Ms Margaret


Heath, David (Somerton & Frome)
Morley, Elliot


Henderson, Doug (Newcastle N)
Morris, Rt Hon Ms Estelle (B'ham Yardley)


Henderson, Ivan (Harwich)



Hepburn, Stephen
Mountford, Kali






Mudie, George
Smith, Llew (Blaenau Gwent)


Mullin, Chris
Smith, Sir Robert (W Ab'd'ns)


Murphy, Denis (Wansbeck)
Snape, Peter


Norris, Dan
Soley, Clive


Oaten, Mark
Spellar, John


O'Brien, Mike (N Warks)
Squire, Ms Rachel


O'Hara, Eddie
Starkey, Dr Phyllis


Olner, Bill
Steinberg, Gerry


O'Neill, Martin
Stewart, David (Inverness E)


Osborne, Ms Sandra
Stewart, Ian (Eccles)


Palmer, Dr Nick
Stinchcombe, Paul


Pearson, Ian
Stringer, Graham


Pendry, Tom
Taylor, Rt Hon Mrs Ann (Dewsbury)


Perham, Ms Linda



Pickthall, Colin
Taylor, Ms Dari (Stockton S)


Pike, Peter L
Taylor, David (NW Leics)


Plaskitt, James
Taylor, Matthew (Truro)


Pollard, Kerry
Temple-Morris, Peter


Pond, Chris
Thomas, Gareth (Clwyd W)


Pope, Greg
Thomas, Gareth R (Harrow W)


Pound, Stephen
Timms, Stephen


Powell, Sir Raymond
Tipping, Paddy


Prentice, Ms Bridget (Lewisham E)
Todd, Mark


Prentice, Gordon (Pendle)
Touhig, Don


Primarolo, Dawn
Trickett, Jon


Prosser, Gwyn
Truswell, Paul


Purchase, Ken
Turner, Dennis (Wolverh'ton SE)


Quin, Rt Hon Ms Joyce
Turner, Dr Desmond (Kemptown)


Quinn, Lawrie
Turner, Dr George (NW Norfolk)


Radice, Rt Hon Giles
Turner, Neil (Wigan)


Rammell, Bill
Twigg, Derek (Halton)


Rapson, Syd
Twigg, Stephen (Enfield)


Raynsford, Nick
Tyler, Paul


Reed, Andrew (Loughborough)
Tynan, Bill


Reid, Rt Hon Dr John (Hamilton N)
Vis, Dr Rudi


Rendel, David
Walley, Ms Joan


Roche, Mrs Barbara
Ward, Ms Claire


Rooker, Rt Hon Jeff
Wareing, Robert N


Rooney, Terry
Watts, David


Ross, Ernie (Dundee W)
Whitehead, Dr Alan


Roy, Frank
Wicks, Malcolm


Ruddock, Joan
Williams, Rt Hon Alan (Swansea W)


Russell, Bob (Colchester)



Ryan, Ms Joan
Williams, Alan W (E Carmarthen)


Sanders, Adrian
Willis, Phil


Sarwar, Mohammad
Wills, Michael


Savidge, Malcolm
Wilson, Brian


Sawford, Phil
Winnick, David


Sedgemore, Brian
Winterton, Ms Rosie (Doncaster C)


Shaw, Jonathan
Wise, Audrey


Sheerman, Barry
Wood, Mike


Simpson, Alan (Nottingham S)
Woolas, Phil


Smith, Rt Hon Andrew (Oxford E)
Wray, James


Smith, Angela (Basildon)
Wright, Anthony D (Gt Yarmouth)


Smith, Rt Hon Chris (Islington S)
Wright, Dr Tony (Cannock)


Smith, Miss Geraldine (Morecambe & Lunesdale)
Wyatt, Derek



Tellers for the Ayes:


Smith, Jacqui (Redditch)
Mr. Mike Hall and


Smith, John (Glamorgan)
Mr. Kevin Hughes.


NOES


Gray, James
Tellers for the Noes:



Mr. Eric Forth and


Wilshire, David
Mr. Edward Leigh.

Question accordingly agreed to.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

TERMS AND CONDITION OF EMPLOYMENT

That the draft Maternity and Parental Leave etc. Regulations 1999, which were laid before this House on 22nd November, be approved.—[Mr. Touhig.]

The House divided: Ayes 277, Noes 2.

Division No. 11]
[10.39 pm


AYES


Ainger, Nick
Dawson, Hilton


Ainsworth, Robert (Cov'try NE)
Dean, Mrs Janet


Alexander, Douglas
Dismore, Andrew


Allan, Richard
Donohoe, Brian H


Allen, Graham
Doran, Frank


Anderson, Donald (Swansea E)
Dowd, Jim


Anderson, Janet (Rossendale)
Drew, David


Ashton, Joe
Eagle, Angela (Wallasey)



Eagle, Maria (L'pool Garston)


Atherton, Ms Candy
Efford, Clive


Atkins, Charlotte
Ennis, Jeff


Austin, John
Etherington, Bill


Barnes, Harry
Fisher, Mark


Barron, Kevin
Fitzpatrick, Jim


Battle, John
Flint, Caroline


Bayley, Hugh
Flynn, Paul


Beckett, Rt Hon Mrs Margaret
Foster, Rt Hon Derek


Beith, Rt Hon A J
Foster, Michael J (Worcester)


Benn, Hilary (Leeds C)
Fyfe, Maria


Benn, Rt Hon Tony (Chesterfield)
Gardiner, Barry


Bennett, Andrew F
George, Bruce (Walsall S)


Betts, Clive
Gerrard, Neil


Blears, Ms Hazel
Gibson, Dr Ian


Blizzard, Bob
Gilroy, Mrs Linda


Bradley, Keith (Withington)
Godman, Dr Norman A


Bradley, Peter (The Wrekin)
Goggins, Paul


Brinton, Mrs Helen
Golding, Mrs Llin


Brown, Russell (Dumfries)
Gordon, Mrs Eileen


Browne, Desmond
Griffiths, Jane (Reading E)


Burden, Richard
Griffiths, Nigel (Edinburgh S)


Burgon, Colin
Griffiths, Win (Bridgend)


Butler, Mrs Christine
Grogan, John


Campbell, Alan (Tynemouth)
Hall, Patrick (Bedford)



Campbell—Savours, Dale
Hamilton, Fabian (Leeds NE)


Cann, Jamie
Hanson, David


Caplin, Ivor
Harman, Rt Hon Ms Harriet


Casale, Roger
Heal, Mrs Sylvia


Caton, Martin
Healey, John


Cawsey, Ian
Heath, David (Somerton & Frome)


Chapman, Ben (Wirral S)
Henderson, Doug (Newcastle N)


Chaytor, David
Henderson, Ivan (Harwich)


Clapham, Michael
Hepburn, Stephen


Clark, Rt Hon Dr David (S Shields)
Heppell, John


Clark, Dr Lynda (Edinburgh Pentlands)
Hesford, Stephen



Hill, Keith


Clark, Paul (Gillingham)
Hinchliffe, David


Clarke, Eric (Midlothian)
Hoon, Rt Hon Geoffrey


Clarke, Rt Hon Tom (Coatbridge)
Hope, Phil


Clarke, Tony (Northampton S)
Hopkins, Kelvin


Clelland, David
Hoyle, Lindsay


Coaker, Vernon
Hughes, Simon (Southwark N)


Coffey, Ms Ann
Humble, Mrs Joan


Cohen, Harry
Hurst, Alan



Coleman, Iain
Hutton, John


Colman, Tony
Iddon, Dr Brian


Cook, Frank (Stockton N)
Illsley, Eric


Cotter, Brian
Jackson, Helen (Hillsborough)


Cousins, Jim
Jenkins, Brian



Johnson, Miss Melanie (Welwyn Hatfield)


Crausby, David
Jones, Rt Hon Barry (Alyn)


Cryer, Mrs Ann (Keighley)
Jones, Helen (Warrington N)


Cryer, John (Hornchurch)
Jones, Jon Owen (Cardiff C)


Cummings, John
Kaufman, Rt Hon Gerald


Cunliffe, Lawrence
Keeble, Ms Sally


Cunningham, Jim (Cov'try S)
Keen, Alan (Feltham & Heston)


Curtis—Thomas, Mrs Claire
Kelly, Ms Ruth


Darvill, Keith
Kemp, Fraser


Davey, Edward (Kingston)
Kidney, David


Davey, Valerie (Bristol W)
Kirkwood, Archy


Davies, Geraint (Croydon C)
Kumar, Dr Ashok






Ladyman, Dr Stephen
Rooney, Terry


Lawrence, Mrs Jackie
Ross, Ernie (Dundee W)


Laxton, Bob
Roy, Frank


Leslie, Christopher
Ruddock, Joan


Levitt, Tom
Russell, Bob (Colchester)


Linton, Martin
Sanders, Adrian


Livsey, Richard
Sarwar, Mohammad


Lloyd, Tony (Manchester C)
Savidge, Malcolm


Love, Andrew
Sawford, Phil


McAvoy, Thomas
Sedgemore, Brian


McCartney, Rt Hon Ian (Makerfield)
Sheerman, Barry



Simpson, Alan (Nottingham S)


Macdonald, Calum
Smith, Rt Hon Andrew (Oxford E)


McDonnell, John
Smith, Angela (Basildon)


McGuire, Mrs Anne
Smith, Rt Hon Chris (Islington S)


McIsaac, Shona
Smith, Miss Geraldine (Morecambe & Lunesdale)


McKenna, Mrs Rosemary



Mackinlay, Andrew
Smith, Llew (Blaenau Gwent)


McNamara, Kevin
Smith, Sir Robert (W Ab'd'ns)


McNulty, Tony
Soley, Clive


Mactaggart, Fiona
Spellar, John


McWilliam, John
Squire, Ms Rachel


Mahon, Mrs Alice
Starkey, Dr Phyllis


Mallaber, Judy
Steinberg, Gerry


Marsden, Gordon (Blackpool S)
Stewart, David (Inverness E)


Marsden, Paul (Shrewsbury)
Stewart, Ian (Eccles)


Marshall, David (Shettleston)
Stinchcombe, Paul


Marshall-Andrews, Robert
Stringer, Graham


Martlew, Eric
Taylor, Rt Hon Mrs Ann (Dewsbury)


Maxton, John



Meacher, Rt Hon Michael
Taylor, Ms Dari (Stockton S)


Meale, Alan
Taylor, David (NW Leics)


Michie, Bill (Shef'ld Heeley)
Taylor, Matthew (Truro)


Milburn, Rt Hon Alan
Temple-Morris, Peter


Miller, Andrew
Thomas, Gareth (Clwyd W)


Mitchell, Austin
Thomas, Gareth R (Harrow W)


Moonie, Dr Lewis
Timms, Stephen


Moran, Ms Margaret
Tipping, Paddy


Morgan, Alasdair (Galloway)
Todd, Mark


Morley, Elliot
Touhig, Don


Mountford, Kali
Trickett, Jon


Mudie, George
Truswell, Paul


Mullin, Chris
Turner, Dennis (Wolverh'ton SE)


Murphy, Denis (Wansbeck)
Turner, Dr Desmond (Kemptown)


Norris, Dan
Turner, Dr George (NW Norfolk)


Oaten, Mark
Turner, Neil (Wigan)


O'Brien, Mike (N Warks)
Twigg, Derek (Halton)


O'Hara, Eddie
Twigg, Stephen (Enfield)


Olner, Bill
Tyler, Paul


O'Neill, Martin
Tynan, Bill


Osborne, Ms Sandra
Vis, Dr Rudi


Palmer, Dr Nick
Walley, Ms Joan


Pearson, Ian
Ward, Ms Claire


Pendry, Tom
Wareing, Robert N


Perham, Ms Linda
Watts, David


Pickthall, Colin
Whitehead, Dr Alan


Pike, Peter L
Wicks, Malcolm


Plaskitt, James
Williams, Rt Hon Alan (Swansea W)


Pollard, Kerry



Pond, Chris
Williams, Alan W (E Carmarthen)


Pope, Greg
Willis, Phil


Pound, Stephen
Wills, Michael


Prentice, Ms Bridget (Lewisham E)
Winnick, David


Prentice, Gordon (Pendle)
Winterton, Ms Rosie (Doncaster C)


Prosser, Gwyn
Wise, Audrey


Purchase, Ken
Wood, Mike


Quinn, Lawrie
Woolas, Phil


Radice, Rt Hon Giles
Wray, James


Rammell, Bill
Wright, Anthony D (Gt Yarmouth)


Rapson, Syd
Wright, Dr Tony (Cannock)


Reed, Andrew (Loughborough)



Rendel, David
Tellers for the Ayes:


Roche, Mrs Barbara
Mr. Mike Hall and


Rooker, Rt Hon Jeff
Mr. Kevin Hughes.





NOES


Gray, James
Tellers for the Noes:



Mr. Eric Forth and


Leigh, Edward
Mr. Christopher Gill.

Question accordingly agreed to.

Orders of the Day — COMMITTEES

Mr. Deputy Speaker: With permission, I shall put together the motions relating to Committees.
Ordered,

AGRICULTURE

That Ms Sally Keeble and Mrs. Diana Organ be discharged from the Agriculture Committee and Mr. David Borrow and Mr. David Drew be added to the Committee.

CULTURE, MEDIA AND SPORT

That Mrs. Diana Organ be added to the Culture, Media and Sport Committee.

DEFENCE

That Ms Dari Taylor be discharged from the Defence Committee and Mr. Stephen Hepburn be added to the Committee.

ENVIRONMENT, TRANSPORT AND REGIONAL AFFAIRS

That Dr. Alan Whitehead be discharged from the Environment, Transport and Regional Affairs Committee and Mr. Hilary Benn be added to the Committee.

HOME AFFAIRS

That Mr. Chris Mullin be discharged from the Home Affairs Committee and Mr. Ian Cawsey be added to the Committee.

SOCIAL SECURITY

That Mr. David Crausby be added to the Social Security Committee.—[Mr. John McWilliam, on behalf of the Committee of Selection.]

Orders of the Day — PETITION

Council Tax

Mr. Austin Mitchell: I present a petition from Helen Houghton and 740 electors from my constituency and that of my hon. Friend the Member for Cleethorpes (Shona McIsaac), who is present. They live in pensioners' flats, which are rated as band A for council tax purposes, with values up to £40,000, and pay the same council tax as people with two, three and four-bedroom houses, because the average three-bedroom terraced house in Grimsby and Cleethorpes is valued at £30,000 or less.
Helen Houghton, the lead signatory, pays £43 a month, allowing for the reduction for single people, which she would get whatever band her accommodation was in.


The petition asks for a new lower band to be created for such accommodation for pensioners and students in flats and bedsits. The petition states:
The Humble Petition of Helen Houghton, pensioner, and 740 others of like disposition, sheweth
That living in warden controlled dwellings in Grimsby and North East Lincolnshire, as your Petitioners all do, they are required to pay the same Council Tax for their bedsit accommodation as those living in their own houses with as many as three bedrooms, because their properties are all in the same band.
Wherefore your Petitioners pray that your honourable House will consider the plight of pensioners in group dwellings and introduce a new additional band to cover this type of property.
And your Petitioners, as in duty bound, will ever pray.
The petition is signed by Helen Houghton, 3 Stratford house, Barmouth drive, Grimsby, Joyce Miller, 1 Stratford house, Barmouth drive, Grimsby, and 738 others. I commend it to the House.

To lie upon the Table.

Orders of the Day — Integrated Transport Policy (Weston-super-Mare)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Touhig.]

Mr. Brian Cotter: I am delighted to have the opportunity to debate a subject that is very important to my constituents. Integrated transport will be the way of the future. It means implementing transport policies that work with, not against, each other, offer genuine alternatives, especially to private car users, and better address the needs of rural and urban areas alike.
An integrated transport strategy must put people at its heart. Lack of access to affordable and reliable transport cuts people off from essential services and from their family and friends, and can limit employment opportunities.
Weston-super-Mare lost its bus station in 1986. The site was sold off by the bus company, the station demolished and a block of flats built in its place. A local resident was quoted in the local Mercury newspaper shortly after my election as saying:
It was the worst day of our lives when our old bus station was sold off and demolished. It has left retired and disabled bus users, not to mention tourists, out in the cold.
That sums it up well.
Weston is a seaside resort and is well worth a visit. As a holiday destination it needs to offer a warm welcome to visitors. I am pleased to say that residents and those involved in the tourism industry do a great job in making it a nice place to stay, but sometimes first impressions count. What first impression do visitors to Weston arriving by bus or coach get?
The tourist information office in Weston told me that the current situation is, at best, confusing. People, especially tourists, do not know where buses leave from and, as there are currently several bus focus areas, it can be difficult to direct them precisely. The office says that it has to handle a lot of queries about transport issues, thereby reducing the time available to help people with tourism issues. Problems are caused on the sea front, where day trippers come in coaches that interfere with the usual bus stopping areas. Local buses have to double park, causing congestion and a possible safety hazard.
One of the workers at the local disability information service told me what happened when she was waiting at the main car park in the town centre, which is used by some national coach companies as a pick-up point. She was waiting for a 1 am coach to Dover, but the coach did not arrive until 5 am because of a breakdown. She was with a group of 20 people, many of them elderly and frail, and the conditions were freezing. There was no shelter, nowhere to sit down and no information about what was happening. Had there been a bus station, that need not have happened.
Another situation arose when an elderly lady came to Weston for a week's holiday. She was dropped off by the coach on the sea front at 8 pm, but her hotel was some way away. There was no telephone, no taxi service, no shops open and no toilets. After carrying her case through the rain for nearly an hour to her hotel, it took her two days to recover and, naturally enough, she does not intend to come back to Weston.
Since 1986, there has been continuing demand for a bus station and transport interchange in the town. We need to see true integration of services, bringing together north Somerset council, First Bus, Southern National, National Express, Great Western Trains, and Wales and West Trains in a genuine transport focus. Hand in hand with that would be through-ticketing on buses and trains, which should be easy because Badgerline and Great Western are owned by the same company.
People in Weston and elsewhere have concerns about the sale of railway land. One site in Weston is up for grabs, but it should be considered as a possible site for transport integration. A bus station would provide shelter, security, information and refreshment for visitors and residents alike. A high quality interchange system centred around a bus station, the town centre and the railway station would enable people conveniently to mix and match bus, train, walking, car and bicycle.
North Somerset council does not have the budget to build a bus station, but the mega-rich First group, which now owns Bristol airport, runs Great Western Trains and has a near monopoly of bus routes in my part of the west country, certainly has the resources. I would like the Government to take on the bus giants and demand better investment in bus services throughout Britain.
Those of my constituents who live in rural areas often say to me that the Government are more concerned about the problems of urban areas and cities than they are about village life and the countryside. In fact, one in four of my constituents lives in the rural areas around Weston-super-Mare. The villages of north Somerset make a wonderful place to live—I should know because I live in one of them—but the people who live in them are being forced into their cars by inadequate public transport links. North Somerset council subsidises the bus company, mostly in rural areas, by some £250,000 a year. Despite that, too many villages have expensive and inadequate bus links.
An extraordinary story appeared in the papers this morning about Badgerline, the bus company that serves my constituency. A fully loaded bus ground to a halt half way up a hill. The driver had to ask the passengers to disembark. He then drove to the top of the hill and waited for the passengers to catch up so that they could carry on with their trip. It is bizarre for a bus company to be unable to run its buses properly. The last time I heard such a story was in a Postman Pat book. As it happens, that all took place in the nearby town of Bath, not in my constituency.
Local authorities try to respond to transport needs, but they have little power to oblige bus and train operators to compete with the car instead of with each other. At the moment, those operators have to give only minimal notice if they alter services. That is not conducive to providing high-quality information, nor to winning passengers' loyalty.
Local authorities spend thousands of pounds promoting the use of buses by means of timetables, route maps, new bus shelters and anti-drink driving campaigns—all of which provide free publicity for the bus companies. However, councils get no return on the money spent. The bus companies have complete control of timetables, fares, routes, and so on.
The village of Hutton in my constituency had an important link to the local hospital that was broken recently. The village has many elderly residents, and that was a major blow. The bus company responded by saying that the route was not profitable. Increasingly, it is being left to cash-strapped local authorities to keep open such routes, which can be lifelines. Rural communities need lower fares and more convenient and accessible services, so that public transport can be a realistic alternative in people's transport needs.
The Government must take a lead in guaranteeing decent service levels for communities such as those in north Somerset. Traffic problems will get worse if action is not taken. Banwell village in my constituency has the highest level of air pollution in the district. The pollution is caused by the dense, slow-moving or stationary traffic on the A371 that goes through the village. It is worth stating that benzine and nitrogen dioxide—the pollutants associated with high levels of road traffic—exacerbate the symptoms of people, and especially of children, suffering from lung disease. They also promote the development of cancers and reduce the supply of oxygen to the heart. All those health issues are very serious.
Many small villages are becoming more dangerous and unpleasant to live in and visit because of the growth in traffic. The Council for the Protection of Rural England has estimated that traffic in rural areas could double by 2025. In places such as Banwell, village life is being choked to death. Something must be done.
The provisional local transport plan submitted to the Department of the Environment, Transport and the Regions by North Somerset council includes a proposal to undertake an assessment of transport options for relieving Banwell, and the possibility of a bypass. I urge that a more detailed study be made. I would strongly support that. I also urge that prompt action be taken, with Government support, to follow it up.
Congresbury, the village in which I live, lies on the B3133, a narrow country lane linking my village with the village of Churchill. However, in common with all too many lanes in our country, it is used as a rat run—in this case, between the bigger A370 and the A38. The B3133 is used in particular by heavy goods vehicles, which cause considerable damage to the road and to the properties alongside it. Some walls have been knocked down, and some buildings demolished, by HGVs using the road.
Action must be taken to stop heavy lorries using country lanes as rat runs. The damage caused by lorries using inappropriate roads can be reduced by establishing strategic lorry routes with direction signing and restrictions on weight and height. Indeed, North Somerset council agrees that the only solution is to establish such a strategy for sustainable freight distribution. However, it states that it is not in a position to commence any work to that end. I hope that the Minister will consider ways in which the Department can support the authority in making the matter a priority.
Recently, the problem in rural areas in my constituency was compounded by simultaneous road works on the M5, the A370 and the A38, which are all link roads into Weston-super-Mare. The result, in addition to lengthy traffic jams on the roads concerned, was to encourage traffic to make even more rat runs through villages and along country lanes. We should appreciate it in Weston-super-Mare and in other areas if the Government


could ensure that roadworks were better planned so that not all main roads in an area were dug up at the same time.
Finally, the Government's transport Bill proposes to establish a Strategic Rail Authority, which will no doubt help to repair the damage done by rail privatisation. Still absent, however, are proposals for a strategic transport authority that would cover all forms of transport. That is critical if true integration of transport is to be achieved. People in my constituency want and deserve a truly integrated transport system that will help to tackle the problems experienced in towns and villages alike. I look forward to hearing what the Minister hopes to do about these issues.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): May I begin, as is usual, by congratulating the hon. Member for Weston-super-Mare (Mr. Cotter) on securing the debate? May I also thank him for his courtesy in giving me notice of the key issues that he intended to raise? Let me reassure him immediately that the Government are fully committed to improving the transport system in Weston-super-Mare, and, indeed, in north Somerset and the whole country.
We want a system that is safe, efficient, clean and fair, and we want everyone to be able to have better choice in transport. We will do that by improving public transport, and traffic management and road maintenance, and by creating a more integrated transport system. Before turning to the Government's general progress in implementing our commitment to a more integrated transport system, I would like to respond to some points that the hon. Gentleman made about transport issues in and around Weston-super-Mare.
Each local transport authority is required to prepare a local transport plan, setting out its strategy for transport together with proposals to carry that strategy forward. The provisional local transport plan for north Somerset is currently being assessed by my officials in the Government Office for the South West, so I must be careful not to comment on the merits of proposals in the plan or to speculate on the likely allocation of resources. However, I can make some general observations about the plan.
In preparing the plan, I understand that the council invited wide public participation on how it should address transport needs in its area. To achieve effective participation, five stakeholder workshops were established to maximise local information and to build a consensus about the way forward, while also thinking about the wider context. Each workshop contained a mixture of interests, including Government, statutory authorities, interest groups and organisations, and citizens and users. The workshops were locally based and one covered Weston-super-Mare and surrounding areas. The Government very much welcome North Somerset council's approach in involving local people in the development of its plan.
The process highlighted the perception among people in the district that public transport currently offers a poor alternative to the car. The plan also highlights the problems of congestion on the M5 and the A370 and the problems of heavy lorries using country roads. The hon.

Gentleman has already expressed his concerns on these subjects in correspondence with Ministers as well as in the debate.
The plan acknowledges that air pollution levels are high in some places. North Somerset council will need to consider drawing up action plans on air quality where it does not meet acceptable standards. The hon. Gentleman is particularly concerned about that problem in Banwell, as a result of heavy lorries using the main road though the village. He will be aware that the provisional local transport plan identifies a bypass as one option for relieving the village's traffic problems.
The plan also identifies a wide range of opportunities for improving public transport and for addressing other transport issues in the district. These include increasing the frequency of both rail and bus services, more park-and-ride schemes, bus priority measures, and fully integrated ticketing. Meanwhile, new measures have already been introduced, including a quality partnership between North Somerset council and First Badgerline buses. The aim of the partnership is to achieve joint measures that will promote the use of local bus services, including investigating the development of a flexible feeder system linking rural bus services with those along main routes.
The council proposes to develop a database, which will be used for a telephone inquiry service and also for keeping an electronic record of all bus stop locations. I am also aware that the council has, together with local partners, applied for funding through the rural bus challenge. We are currently considering that and other bids, and hope to make an announcement shortly.
The hon. Gentleman made some observations about inadequate rural bus services. I understand that North Somerset council did not make a bid for the Government's rural bus grant scheme—funding of about £170 million over three years—that has led to the development of 1,800 new and refurbished bus routes in our rural areas nationwide.
North Somerset council has made it clear that it has not been able to make as much progress as it would have liked on some of the elements in the provisional plan. However, I understand that the council will be developing more detailed proposals during the next few months, for inclusion in the full local transport plan to be submitted next summer.
Clearly, it is for the council to decide the content of its local transport plan. However, guidance issued to all local transport authorities points to the need for plans to address a wide range of transport issues, including those relating to public transport interchanges, rural bus services, air quality and the transportation of freight—matters to which the hon. Gentleman referred.
As the hon. Gentleman knows, the Government have taken major steps in promoting a more integrated transport system. Our White Paper on the future of transport, which we published within 18 months of being elected, was the first comprehensive statement of transport policy for nearly 20 years. For the first time, we want to integrate transport policy with other key related matters, such as the environment, health, education and land-use planning. The White Paper sets out the framework for sustainable transport for this and the next Parliament, and beyond.
Of course, we realise that motorists will not readily switch to public transport unless it is significantly better and more reliable. That is why the aim of the White Paper is to increase choice by improving public transport and providing better conditions for pedestrians and cyclists. To do that, we are committed to providing more resources for local transport—the comprehensive spending review allocated a further £700 million over the next three years. As I pointed out, we are also spending an extra £170 million on rural buses.
In order to put those new measures into practice, we published the new Transport Bill last Wednesday. The Bill contains measures to promote the use of railways through the Strategic Rail Authority, to improve bus services and to reduce road congestion and pollution. From time to time, there have been questions about the apparent delay in introducing that legislation. The truth is that there are no instantaneous solutions, and much preparatory work was required to enable us to identify policies to overcome the failures of the past 20 years.
We inherited high and growing levels of road traffic congestion, poor public transport, inadequate provision for pedestrians and cyclists, and significant under-investment in road maintenance. Nevertheless, we have already made significant headway through increased investment, especially in public transport and road maintenance. The measures contained in the Bill pave the way for the modern, effective transport system that the country needs and deserves.
The Bill establishes the Strategic Rail Authority, to which the hon. Gentleman referred. The mission of the SRA will be to promote the use of the railways for passengers and freight, to secure the development of the railway network, and to contribute to an integrated transport system. The Bill also recognises the fact that buses are crucial to the success of our integrated transport system and can provide a real alternative to car use. It therefore gives local authorities the power to improve local bus services through quality partnerships and quality contracts. About 130 such partnerships have already been established, voluntarily, throughout the country—often leading to major increases in bus usage of between 10 and 40 per cent. The Bill also includes provisions to improve passenger information, to encourage integrated ticketing and to promote service stability.
In addition, the Bill gives local authorities new powers to introduce charges on congested roads and to introduce workplace parking charges. The money raised will be put back into improving local transport, improving choice and tackling congestion.
As I said earlier, it will be for local authorities to put those and other measures into practice. We believe that local people are best placed to find local solutions to local transport problems. That is why we have introduced local transport plans as a centrepiece of our proposals. Those are replacing the existing transport policies and programmes system of annual submissions, and provide a more strategic, longer term view.
Local transport plans set out authorities' strategies for transport, and will be the key mechanism for pulling all that activity together locally. They include all forms of transport and set out proposals for implementation, including road user and workplace parking charges, and bus quality partnerships. There will also be greater certainty of funding for local authorities and significantly greater local discretion over the allocation of resources.
As a first stage in that process, all county and unitary authorities have now submitted their provisional five-year plans, on the basis of which resources will be allocated for the next financial year. Authorities will then roll their plans on by one year and next summer will submit full plans for the period from 2001 to 2006. We are currently assessing the provisional plans, and will shortly be announcing the allocation of resources for next year.
From the feedback so far, it would seem that authorities are responding positively to the challenge of producing local transport plans. They have overwhelmingly welcomed the national policy framework and the process of preparing plans is acting as a positive force for change.
Although a great deal of work has already been done to improve public transport in this country, we recognise that much more needs to be done to implement the measures in the White Paper. We are fully committed to establishing a new and better transport system, and to ensuring that the necessary financial resources are in place. The national framework has now been put fully in place with the publication of the new Transport Bill, and it is now for local authorities to take matters forward.
At a local level, North Somerset council is clearly committed to creating a more integrated transport system in its district. I am sure that the hon. Gentleman will appreciate that is too early for me to speculate on the outcome of the local transport plan process in North Somerset or on the work that needs to be done in preparing a full plan for submission next year. However, the position on the provisional plan will become clearer when the allocations are made for the new financial year, and I can assure the hon. Gentleman that an announcement on that will be made very shortly.

Question put and agreed to.

Adjourned accordingly at eighteen minutes past Eleven o'clock.